Blog / July 6, 2017

Why the US needs to put an end to anonymously-owned companies

What’s lurking behind the opioid crisis, Iran’s terrorist financing and the allegations of potential collusion between Russia and the Trump campaign? Anonymous companies.

Prescription drugs in the US

Creative Commons licence: Flickr.com/ep_jhu

While the US is busy focused on healthcare reform and the investigation into Russia’s interference in the 2016 US election, the shady and pernicious practice of using anonymous companies to hide companies’ real owners remains one of the most pressing and dangerous problems of our time. These companies are often used by the corrupt and other criminals to get, hide and move dirty money.  And they’re doing it right now in the US.

From multi-million-dollar schemes tricking the elderly out of their life-savings to the selling of faulty weapon parts to the Pentagon, anonymously-owned companies have time and again robbed US citizens of millions. Anonymous companies have also been linked to fake medical clinics as well as the deadly opioid crisis currently ravaging the US. These companies put lives at risk and continue to undermine US national security. Setting up anonymous companies in the US is not only legal, it’s also one of the easiest countries in the world where one can do so.

Last week, both the US Senate and House of Representatives introduced bills which would force companies formed in the US to disclose their real owners, essentially making it harder for the corrupt and other criminals to hide behind these companies. 

Similar bills have been introduced in Congress before, but this time, in addition to anti-corruption advocates, there’s a significant push from many law enforcement agencies, the Clearing House Association, which represents the 24 largest banks, and the Independent Community Bankers of America. Knowing who the real owners and operators of companies are will help them do their job better to keep the US safe from crime and terrorism and to keep the financial system clean.

There’s significant support from the business community as well, as the legislation is also endorsed by investors managing assets worth more than $855 billion.

Just a day after this legislation was introduced, the Southern District of New York announced that a $500 million high rise building in New York City, which was being used as a front for the Iranian government for over 10 years, could be forfeited. Through an anonymous company incorporated in NY, Iran was effectively able to bypass US sanctions and millions were funneled into Iran – money that could have been used to finance terrorism. 

Also troubling is a recent report by USA Today saying that since Donald Trump won the Republican nomination, the majority of his companies’ real estate sales have been to anonymous companies. This creates the potential for significant corruption and conflict of interest risks as the public can’t know which companies or foreign governments may or may not be trying to influence the president. The report found his real estate sales to secretive buyers to be up by 66% in the last year.

It’s time to put an end to anonymously-owned companies. It’s time for Congress to show fraudsters, drug traffickers, terrorists and others trying to hide from scrutiny that they have no place in the US. 

You might also like