Sen Kennedy: Don’t bankroll the Taliban through the IMF Back door, Nationalize Banking

Nov 16 2021

WASHINGTON – Sen. John Kennedy (R-La.) today introduced an amendment to the National Defense Authorization Act that would require an act of Congress before the Taliban could receive any current or future allocation of special drawing rights through the International Monetary Fund (IMF). These special drawing rights (SDR) burden U.S. taxpayers because the Taliban could exchange the drawing rights for U.S. dollars at any time.

“If the IMF recognizes the Taliban as Afghanistan’s government, those terrorists will automatically have access to hundreds of millions of American tax dollars through the most recent allocation of special drawing rights. It’s Congress’s job to make sure America doesn’t end up bankrolling the Taliban’s violence against women, children and ethnic minorities. I can’t imagine any person who understands the Taliban’s human rights abuses and wouldn’t support this amendment,” said Kennedy. 

The IMF created the SDR as an international reserve asset to supplement IMF member countries’ official reserves. The IMF distributes these assets to member countries, including Afghanistan, based on each country’s IMF quota, which depends on its size relative to the global economy. 

Member countries receive SDRs and can exchange them for U.S. dollars. The IMF approved $650 billion in SDRs in August, $450 million of which was allocated for Afghanistan. 

That distribution to Afghanistan has been blocked since the Taliban took control. That move, however, can be reversed should the majority of the IMF voting shares move to recognize the Taliban as a legitimate government. The U.S. cannot veto that recognition. 

Background

This summer, President Biden agreed to a general allocation of IMF SDRs totaling $650 billion without consent from Congress. Large portions of that allocation flowed to dictators and countries that actively oppose American interests and violate human rights.

China, Russia, Venezuela and state sponsors of terrorism like Syria and Iran received a huge portion of this allocation. 

While some have claimed that SDRs offer the U.S. a no-cost way to assist poor countries, this is demonstrably false. Large IMF allocations require the U.S. to issue debt in order to cover the loans issued through SDRs. The U.S. has to pay interest on that debt, and that interest would exceed any interest that the U.S. might receive on the loans it issues.

There is no requirement that countries that receive loans from the U.S. through SDRs ever repay the principal. As a result, the financial burden of these loans falls on the U.S. taxpayer.

Kennedy previously introduced the No Dollars for Dictators Act to prohibit allocations of SDRs at the IMF from going to perpetrators of genocide and state sponsors of terrorism unless Congress authorizes the allocation. The Bill is below:

WASHINGTON – Sen. John Kennedy (R-La.) today questioned President Biden’s nominee for Comptroller of the Currency Saule Omarova on her membership in a communist organization and her radical views about regulating the economy and banking system.

Sen Kennedy Sen. John Kennedy (R-La.) questioned President Biden’s nominee for Comptroller of the Currency Saule Omarova on her membership in a communist organization and her radical views about regulating the economy and banking system.

Key excerpts include:    

Kennedy: “There was a group called the Young Communists, and you are a member, is that right?”

Omarova: “I’m not exactly sure which group you’re referring to.” 

Kennedy: “Well, the formal name of it is the Leninist Communist Young Union of the Russian Federation, and it’s also known as the Leninist Komsomol of the Russian Federation. And it’s commonly referred to as the Young Communists. Were you a member?”

. . .

Kennedy: “Have you resigned?”

Omarova: “From the—”

Kennedy: “From the Young Communists.”

Omarova: “You grow out of it with age automatically.”

Kennedy: “Did you send them a letter though, resigning?”

Omarova: “Senator, this was many, many years ago. As far as I remember how the Soviet Union worked was at certain age, you automatically stop being—”

Kennedy: “Could you look at your records and see if you can find a copy?”

Background

• In a 2021 video, Omarova said: “We want [the fossil fuel industry] to go bankrupt if we want to tackle climate change.”
• In October 2020, Omarova wrote a paper titled “The People’s Ledger,” in which she proposes nationalizing the very industry she has been nominated to oversee. In this paper, Omarova proposes a plan to “effectively end banking as we know it.”
• In May 2019, Omarova praised the former Soviet Union, tweeting: “Say what you will about old USSR, there was no gender pay gap there. Market doesn’t always ‘know best.’”
• In 2019, Omarova joined a “Marxist Analysis and Policy” Facebook group, which describes itself as a forum for a “diverse range of Socialist and anti-capitalist views.”

Watch the video of Kennedy’s questioning here.

A BILL
prohibit allocations of Special Drawing Rights at the International Monetary Fund for perpetrators of geno- cide and state sponsors of terrorism without congres- sional authorization.
Be it enacted by the Senate and House of Representa- tives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘No Dollars for Dic- tators Act of 2021’’.
SEC. 2. FINDINGS.
Congress makes the following findings:

ROS21B24 NWW
S.L.C.
2
(1) The President has agreed to a general allo-
1
2 cation of Special Drawing Rights at the Inter-
3 national Monetary Fund totaling $650,000,000,000
4 without consent from Congress.
5 (2) Special Drawing Rights are distributed ac-
6 cording to a country’s economic standing in the
7 global economy, allowing the wealthiest countries in
8 the world to receive the most Special Drawing
9 Rights of all members of the International Monetary
10 Fund.
11 (3) The President’s justification for supporting
12 the proposed allocation is to allow low-income coun-
13 tries to exchange their Special Drawing Rights for
14 currency to fund efforts to combat the COVID–19
15 pandemic.
16 (4) Under the proposed allocation of
17 $650,000,000,000 Special Drawing Rights—
18 (A) Group of Twenty countries, the largest
19 economies in the world, would receive the bulk
20 of the Special Drawing Rights, totaling
21 $426,000,000,000; and
22 (B) only 3 percent, or $21,000,000,000,
23 would be given to the intended recipients, the
24 poorest countries in the world.

ROS21B24 NWW
S.L.C.
3
(5) The President recommends a Special Draw-
1
2 ing Rights allocation that sends tens of billions of
3 dollars in aid to dictators, including Xi Jinping,
4 Vladimir Putin, Hassan Rouhani, Bashar al-Assad,
5 and Nicol ́as Maduro.
6 (6) Under the proposed allocation, the People’s
7 Republic of China, a known perpetrator of genocide,
8 stands to receive $22,000,000,000, which is more
9 than the $21,000,000,000 all the poorest countries
10 combined will receive.
11 (7) Countries designated as state sponsors of
12 terrorism would also receive Special Drawing Rights,
13 with $3,500,000,000 going to Iran and
14 $900,000,000 going to Syria.
15 (8) The notion that Special Drawing Rights are
16 a no-cost way to help poor countries procure
17 COVID–19 vaccines is demonstrably false, and fur-
18 ther would require the United States to issue debt
19 and pay interest on that debt in order to cover the
20 loans issued through Special Drawing Rights.
21 (9) On March 24, 2021, the Secretary of the
22 Treasury, Janet Yellen, acknowledged that a Special
23 Drawing Rights allocation comes at a cost to the
24 United States taxpayer, as the United States is fi-
25 nancially responsible for exchanging United States dollars in return for Special Drawing Rights pre-
sented to the United States.
(10) It is the duty of Congress to decide how
taxpayer dollars are used and whether or not United States dollars should be exchanged for Special Drawing Rights that will be awarded to dictators and countries that actively oppose the national inter- ests of the United States.
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