WASHINGTON — “This bill…is conducting aid in a transformative way,” said Sen. Bob Corker (R-Tenn.) in a press conference about the End Modern Slavery Initiative Act, “[by]leveraging the great leadership abilities of our country…to deal substantially with this issue of [modern slavery (aka human trafficking)].”
On Feb. 24, 2014, less than a week after presiding over two hearings about modern slavery, Sen. Corker introduced the End Modern Slavery Initiative Act of 2015 to the Senate Committee on Foreign Relations, which he chairs.
The bill aims “to marshal resources to undertake a concerted, transformative effort that seeks to bring an end to modern slavery” by forming a private nonprofit corporation known as “End Modern Slavery Initiative Foundation.”
Though it will receive grants from the U.S. government, the Foundation is ultimately an independent entity. Consequently, the Foundation can take “any gift, donation, bequest, or devise of real or personal property from any government or private sector individual or organization” as long as it conforms to the provisions of the bill and of section 501(a) of the Internal Revenue Code of 1983.
The latter’s provisions are particularly important because section 501 of the Internal Revenue Code will make the Foundation tax-exempt. To keep its exemption from federal taxes, the Foundation will have to ensure that its “net earnings of such entity [do not]inur[e]to the benefit of any private shareholder or individual.” If people make a profit from participating in the Foundation, the Foundation will no longer qualify for tax-exempt status under section 501.
To carry out its objectives, the Foundation will have a workforce of non-governmental employees, a CEO and a board of directors at whose “exclusive discretion” the CEO will be employed. The board will “include individuals with recognized relevant professional expertise and a survivor of modern slavery.”
The choice to include a survivor of modern slavery is significant because it seems to be a response to proposals made by speakers from the modern slavery hearings. During the Feb. 4, 2015 hearing, one speaker, Shandra Woworuntu, recommended the U.S. government create a council of modern slavery survivors who could “review federal government policy and programs on” modern slavery.
Furthermore, the choice is also a positive response to H.R. 500, the Survivors of Human Trafficking Empowerment Act, a bill the House Committee on Foreign Affairs is currently examining. H.R. 500 more or less would make Woworuntu’s recommendation a reality.
Beholden to the board, the CEO will have to “ensur[e]that foreign government and private sector funding commitments are fully realized.” To do so, the CEO will have to compile data on “all relevant auditing, accounting, taxation, and legal requirements” and fundraising opportunities and then synthesize that data to formulate “all necessary strategies and agreements for the End Modern Slavery Initiative Foundation.”
Ultimately, the board of directors will “reserve the right of review and approval of major agreements as appropriate” and the right to approve measures with a majority vote.
According to Sen. Corker, making the Foundation a corporation will allow the U.S. to utilize the “best practices” found in the private sector.
Although, in the press conference, Sen. Corker emphasized the importance of the private sector, it would be more apt to describe the Foundation as a collaboration between the public and private sector on all levels of government.
The bill plans on funding the Foundation with a combination of federal grants, contributions from foreign governments and donations from non-governmental organizations and individuals. According to the bill, the U.S. government will provide “seed funding” to the Foundation in the form of grants totaling $224,285,710.
Put in the context of the U.S.’s expenditures, that number is approximately 1.7 percent of the cost of the 12.9-billion dollar aircraft carrier the U.S. is currently constructing.
The grants will come from the State Department. The Secretary of State will provide these grants with the expectation that the Foundation funds contribute to “the freeing and sustainable recovery of victims of modern slavery,” “prevent individuals from being subject to modern slavery” and “enforce laws that punish both individuals and corporate entities that engage in modern slavery.”
Sen. Corker expects these grants to help the Foundation to ultimately raise $1.5 billion in donations “over an initial seven year period.” In addition, the Foundation’s board of directors will be required to submit a plan to raise an additional $500 million from the private sector.
With potentially two billion dollars in funds, the Foundation will “complement the comprehensive foreign assistance programs of the United States Government.” This means that at a minimum, the Foundation will focus on sex trafficking and slavery in “corporate supply chains.”
To tackle these problems, the Foundation will work with partner countries with a “demonstrated political motivation and sustained commitment by government entities of such jurisdiction to undertake meaningful measures to address severe forms” of modern slavery. Together, the Foundation and these countries will “develop the capacity of national and local government institutions to enforce” modern slavery laws.
While carrying out its operations, the Foundation will have to comply with the bill’s strong transparency standards. The standards come from section 504 of the National Endowment for Democracy Act. The section requires that grant recipients undergo audits from independent auditors and have their books looked at by the Comptroller General of the United States and the General Accountability Office.
Following corporate models, the End Modern Slavery Initiative Act attempts to address the issue of modern slavery with an efficient, systematic and transparent approach.
– Dean Delasalas