UConnPIRG applauds bills designed to end anonymous shell companies in US

UConnPirg supports new bill to end shell companies (Jason Jiang/The Daily Campus)

Consumer protection group ConnPIRG praised bills introduced in both the Senate and the House of Representatives designed to put an end to anonymous shell companies in the United States.

United States Representatives Peter King (R-NY) and Carolyn Maloney (D-NY) recently introduced the Corporate Transparency Act of 2017 with Senate companion bill, True Incorporation Transparency for Law Enforcement (TITLE) Act of 2017, introduced by Senators Chuck Grassley (R-IA) and Sheldon Whitehouse (D-RI)

“If enacted, these bills would give law enforcement an important tool for investigating a number of crimes that are facilitated by money laundering through anonymous shell companies,” a ConnPIRG press release said.

Anonymous shell companies are corporations that exist simply to execute transactions and do not themselves have any significant assets or operations. Companies are not required to list their real owners or the beneficiaries of their operations.

“Consumer scams, defrauding taxpayers, tax evasion, secretive campaign spending, corruption, sanctions evasion, drug trafficking, and human trafficking are all facilitated by anonymous shell companies,” ConnPIRG State Director Kate Cohen said.

Fifth-semester economics and human rights major and incoming state board chair of ConnPIRG Kharl Reynado aligned UConnPIRG’s position on the bill with that of ConnPIRG.

“I agree with ConnPIRG’s stance on the issue—obviously. This goes to the heart of what ConnPIRG stands for,” Reynado said. “We are a non-profit that fights for the public interest against special interests to protect everyday citizens.”

“This particular bill is vital to consumer protection and I support it,” Reynado said. “We are a huge advocate for consumer protection and this bill would allow us to push forth that agenda.”

ConnPIRG has worked with the Financial Accountability and Corporate Transparency (FACT) Coalition to fight for the creation of a law that would require the government to collect information about the identities of the real, “beneficial” owners of companies operating in the United States.

“The solution is to simply strike ‘anonymous’ out of the equation,” Cohen said. “When criminals can disappear behind a shroud of anonymity to launder their ill-earned money, law enforcement loses the trail and the American people are worse off for it.”

If enacted, the Corporate Transparency Act would establish disclosure requirements mandating companies to provide beneficial owners’ names, current addresses and legal identification upon incorporation. Additionally, it would provide civil penalties for persons who submit false or fraudulent beneficial ownership information or who fail to provide complete or updated beneficial ownership information. The Act requires the Treasury Department to collect beneficial ownership information if a state opts to not enact its own procedures.

The bill is supported on both sides of the aisle and by several groups and individuals including small businesses, banks, law enforcement and faith groups, according to the press release.

Members of ConnPIRG recognize the problems anonymous shell companies pose in our country and applaud these measures as an important step in improving transparency within businesses.

“The United States shouldn’t be a safe haven for criminals, [but] our current incorporation laws make the U.S. just that, allowing everyone from petty criminals to the worst human traffickers to hide behind a veil of corporate anonymity to evade law enforcement and launder ill-gotten money,” Cohen said. “The bipartisan Corporate Transparency Act would put the right tools in the hands of law enforcement to track down the bad guys and ensure that our financial and corporate systems aren’t a tool for bad actors.”


Gabriella Debenedictis is a staff writer for The Daily Campus. She can be reached via email at gabriella.debenedictis@uconn.edu