Issue One today praised Congress for including a new corporate transparency provision targeting secretive shell companies in the newly passed annual defense policy bill.
“This new corporate transparency provision passed by Congress with bipartisan support will help shine a light on the owners of secretive shell companies. By adopting this measure, Congress has given the Federal Election Commission and other government agencies a new tool to learn valuable information about the owners of secretive, politically active shell companies. As Issue One has documented, secretive shell companies are increasingly playing prominent roles in our elections,” said Issue One Executive Director Meredith McGehee.
She continued: “For too long, secretive shell companies have provided cover for foreigners who seek to evade the existing prohibition on their involvement in U.S. elections. The new corporate transparency measure in this year’s National Defense Authorization Act is a small, but useful, step toward shining a light on political dark money and helping ensure that foreigners aren’t using shell companies to illegally influence our elections. Congress should also prioritize further action to create stiffer penalties for Americans who knowingly help foreigners create shell companies to engage in illegal political activity. In the meantime, the database of beneficial owners created by this provision could help the FEC more effectively do its job — if the agency chooses to use it. Issue One strongly urges the FEC to embrace this new tool.”
Supporters of this corporate transparency measure — including the American Banking Association, the Project On Government Oversight, and Transparency International — have noted that this legislation marks the first time the United States has updated its anti-money laundering laws in approximately 20 years.
Among other things, the newly adopted bill — which has bipartisan support in both the House and Senate and was included in this year’s National Defense Authorization Act — will require shell companies, including limited liability companies, to report their beneficial owners to the Treasury Department. Ownership data for LLCs and other companies will not be made public, but these records may be cross-referenced by other government agencies, including the FEC.
Learn more about how foreign money may flow into super PACs through secretive shell companies from Issue One in our “Mystery Money” report.