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The United States has announced sanctions against two senior officials from Palau and the Marshall Islands, accusing them of involvement in corruption schemes that undermined US interests and expanded Chinese influence in the region.

Getting into it: According to the State Department, the President of Palau’s Senate, Hokkons Baules, and former Marshall Islands mayor Anderson Jibas were sanctioned for engaging in “significant corruption” that undermined USinterests and enabled China to expand its influence in the Pacific. Baules was accused of accepting bribes in exchange for promoting the interests of China-based actors (including political, business, and criminal entities) within Palau’s government. Jibas was implicated in the misappropriation of funds from the US-funded Bikini Resettlement Trust, a compensation fund for communities affected by Cold War-era nuclear testing, which reportedly dropped from $59 million in 2017 to just $100,000 by 2023.

The State Department said that the officials’ actions not only constituted personal enrichment at the expense of US taxpayers but also created openings for “malign foreign influence from China and others.”

In reaction to the designation, Baules denied the accusations, calling them baseless and demanding the US provide proof of any wrongdoing to Palauan authorities. “The United States should be ashamed of themselves,” Baules told Australian media. Jibas has not issued a public statement, but reporting by outlets like The Wall Street Journal has linked him to luxury purchases and personal travel allegedly funded by money stolen from the trust.

The State Department defended the sanctions as part of a broader strategy to safeguard US influence in the Indo-Pacific and counter corruption linked to authoritarian regimes. In a statement, the State Department said, “The United States will continue to promote accountability for those who abuse public power for personal gain and steal from our citizens to enrich themselves.”