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Legislative Efforts to Promote Beneficial Ownership Transparency

The Coalition for Integrity is advocating for an end to anonymous companies because they allow corruption to flourish and permit unknown persons to influence elections at all levels of government.  There are currently six bills in Congress to increase beneficial ownership transparency in different ways.  Support these efforts by writing to members of Congress urging them to pass one or more of these proposals. We’ve drafted a template for you below.

Here’s why we are asking you to act NOW.

The use of anonymous companies has a profound effect on ordinary lives in the United States.

  • Inflated House Prices: Purchases of apartments and houses in Manhattan and Miami through anonymous companies, for example, have pushed real estate prices up. And almost every story on money laundering and real estate seems to feature anonymous companies.
  • Facilitating Drug Trafficking: A 2016 report, Anonymity Overdose, by Fair Share charted the connection between the opioid epidemic and the problem of anonymous shell companies.  It pointed to 10 case studies of how anonymous companies were used as money laundering instruments or front operations for opioid traffickers.  Similarly, a report on international money laundering demonstrated that anonymous companies make it more difficult for law enforcement to “follow the money” in drug trafficking cases.
  • National Security Risks: News stories point to how Moscow interfered in Central and Eastern European countries by using anonymous companies to take over important sections of the economy. Anonymous companies enable North Korea to dodge sanctions. Anonymous companies can also be used to hide security risks, such as ultimate ownership of federal high security properties.  The Federal Law Enforcement Officers Association, which represents more than 25,000 federal law enforcement officers from over 65 different agencies, has welcomed Congressional efforts to address the problem that anonymous U.S. corporations significantly hamper efforts to fight terrorism and other serious crimes.
  • Fraud and Abuse: Anonymous companies have been used to steal money from the elderly and other citizens in the U.S. Companies contracting with the federal government have also used anonymous companies to defraud the government.  In 2014, for example, a federal defense contractor, Supreme Foodservice, pleaded guilty to defrauding the government by creating a fake company to act as a middle man and mark up the price of food and drinks sold to the military.
  • Election Financing: The 2016 campaign was the most expensive on record and there are reports that anonymous companies funneled money into Super PACs and independent social welfare organizations, which then spent millions of dollars on issue advertising. This makes it difficult to discern the identities of the players seeking to influence the elections. In previous elections, anonymous companies have been used to disguise campaign contributions.

Legislative Proposals

The two broadest legislative proposals were introduced in both the Senate and House.  The Senate bill, the True Incorporation Transparency for Law Enforcement (TITLE) Act (S.1454), was introduced by Sen. Sheldon Whitehouse (D-RI),  Sen. Charles Grassley (R-IA) and Sen. Dianne Feinstein (D-CA).  The House version, the Corporate Transparency Act of 2017 (H.R.3089), was introduced by Reps. Carolyn Maloney (D-NY) and Peter King (R-NY).  While there are minor differences between the two, both require collection of beneficial ownership at the time a company is formed and access to that information by law enforcement (upon receipt of a subpoena) and financial institutions (with customer consent).

In addition, the House Financial Services Committee is considering legislation that would require disclosure of beneficial ownership at the time of company formation.  Section 9 of the draft Counter Terrorism and Illicit Finance Act would require persons forming a company to file beneficial ownership information with the Financial Crimes Enforcement Network in the Department of the Treasury.  To learn more about the various legislative proposals read our blog here.

What Can You Do?

Tweet at and write to your representatives calling for them to pass key legislation.

Sample Tweet:

@RepHensarling pass incorporation transparency legislation to end corporate anonymity

Sample Email:

Please write to your congressman/woman (Find your Senators and Representatives), Congressman Jeb Hensarling, Chairman, House Committee on Financial Services, and/or members of the Task Force to Investigate Terrorism Financing of the House Committee on Financial Services, to urge passage of bipartisan legislation recently reintroduced to address the problem of corporate anonymity.

Sample Email:

Copy and paste the message below and email it to your representative or to the key individuals named above.

Anonymous companies are used for dirty money transactions and schemes that support drug traffickers and terrorists, defraud government agencies and cheat US citizens, and undermine U.S. institutions, particularly the electoral process. Congress should require transparency now.

We urge you to pass bills now pending to require the collection, maintenance and updating of beneficial ownership information on legal entities for law enforcement purposes.

Coalition for Integrity’s Shruti Shah on CNN explaining if the Panama Papers will aid the global fight against Corruption.

PBS Newshour with Gwen Ifill: Coalition for Integrity’s Shruti Shah discusses the implications of the Panama Papers scandal and calls for reforms in the U.S.