By Bernie Becker - 05/16/12 06:37 PM ET
More than three dozen groups are urging lawmakers to back a measure that looks to battle shell companies by requiring more transparency about their owners.
The groups, many of them left-leaning or good government outfits, told members of the House and the Senate that the legislation would give law enforcement officials more tools to track money and pull back the curtain on shell companies, allowing them to better combat terrorism and financial crimes.
“We encourage you to focus on providing law enforcement with the tools needed to effectively fight crime and the criminals that rely on the anonymity U.S. corporations provide to shield their identities so they can launder money in the U.S.,” wrote the groups, which include Citizens for Tax Justice and Citizens for Responsibility and Ethics in Washington.
The measure – introduced by Sens. Carl Levin (D-Mich.) and Chuck Grassley (R-Iowa) – would also penalize companies that lie about their owners’ information, and mandates that businesses vying for contracts present that information. Grassley and Levin have said the bill will also help root out tax evaders and potential Ponzi schemers.
Reps. Carolyn Maloney (D-N.Y.), Barney Frank (D-Mass.) and Stephen Lynch (D-Mass.) introduced the House version of the measure.
In their letter, the groups lobbying for the legislation also said that it was often easier to form a corporation, something that happens roughly two million times a year in the U.S., than get a driver’s license.
“It is currently legal for a person to incorporate a company without disclosing who benefits from its existence or ultimately controls its activities,” the organizations wrote.
“Investigations continue to reveal that American and foreign terrorists, narco-traffickers, arms dealers, corrupt foreign officials, tax evaders, individuals targeted for financial sanctions and other criminals easily and regularly set up U.S. shell companies, without providing any information about who owns or controls such companies.”
As it stands, the legislation has yet to proceed very far in either chamber.
The Hill: Liberal groups lobby for shell company bill