Law enforcement officials, faith leaders, small business owners and civic organizations call for Sen. Grassley's Leadership on Corporate Transparency
In light of the Panama Papers, a letter signed by 67 organizations and individuals calls for the Senator to renew his leadership on the Incorporation Transparency and Law Enforcement Assistance Act (S. 2489).
WASHINGTON, D.C. - A coalition of faith, small business, good government and law enforcement organizations delivered a letter to Sen. Chuck Grassley (IA) today, urging the senator's leadership for Incorporation Transparency and Law Enforcement Assistance Act (S. 2489). The bill, for which Sen. Grassley has served as a lead sponsor in the past, would end the ability to create anonymous shell companies in the U.S., commonly used in money laundering and at the heart of the corruption uncovered in the Panama Papers leak.
Increased corporate transparency would curb corruption, fraud and tax evasion; promote sound corporate governance and financial stability; enable individuals and companies to know with whom they are doing business; help ensure a level playing field for small- and medium-sized businesses; foster global development and enhance national security. ICAN and Iowa Fair Share organized the sign on effort.
"Anonymous shell companies have been used in a wide variety of crimes. Law enforcement has trouble pinning the criminal to the crime, as the identities of the criminals and their connection to dirty money are shielded by layer after layer of anonymous companies," said Story County Sheriff Paul Fitzgerald. "It’s time to require the true owner of a company's information be made available to law enforcement."
The coalition, which includes local members of the national Financial Accountability and Corporate Transparency (FACT) Coalition, has been working to highlight the local impacts of shell companies in Iowa and make the case for reform.
"Sen. Grassley has recently indicated his interest in stepping up and providing leadership on this bill, and as chair of the judiciary, his support is critical," said Sue Dinsdale of Iowa Citizen Action Network (ICAN). "We'd love to see his name on the dotted line soon."
"Anonymous shell companies are at the nexus of crime, poverty and our global financial system. As a person of faith, I know there is more that we can do to help people suffering because of this abuse," added Julia Rendon, pastor of Crossroads United Church of Christ in Indianola. "This bill is a good place to start."
The bill would require companies to disclose information about the real people who own or control them (often called the “beneficial owners”) at the time they are created. This legislation would enable law enforcement to more effectively and efficiently conduct investigations to combat terrorism and financial crime, as they would have access to important information about the ultimate owners of companies.
Approximately two million corporations are formed in the U.S. each year—which is more than the rest of the world combined. Criminals often layer anonymous corporations, with one owning another and so on, to make it even harder for law enforcement to “trace the money” to figure out who is directing the company’s activity—i.e. the identity of the real criminal. This has been the case in crimes in Iowa as well.
"It is exciting to see the growing efforts to curb the corruption and strike at the waste, fraud and abuse that flows through our financial system," said Gary Kalman, Executive Director of the FACT Coalition based in Washington, DC. "The bill would ensure everyone is playing by the same set of rules and Senator Grassley's early support for the bill will have an immediate and powerful impact."
The fulle letter, and list of signers is below:
Dear Senator Grassley,
We, the undersigned Iowa-based organizations and civic leaders, are writing to express our strong support for the Incorporation Transparency and Law Enforcement Assistance Act. This bill, S. 2489, would end the ability to incorporate anonymously in the U.S., which is crucial to stemming the flow of dirty money laundered through the U.S. financial system.
We understand this is an issue which you have supported in the past, and have indicated you will support again. We encourage you to actively champion this measure and press for its quick passage.
Increased corporate transparency would curb corruption, fraud and tax evasion; promote sound corporate governance and financial stability; increase transparency of campaign contributions; enable individuals and companies to know with whom they are doing business; help ensure a fair and level playing field for small- and medium-sized businesses; foster global development and enhance national security.
The bill would require companies to disclose information about the real people who own or control them (often called the “beneficial owners”) at the time they are created. This legislation would enable law enforcement to more effectively and efficiently conduct investigations to combat terrorism and financial crime, as they would have access to important information about the ultimate owners of companies.
As many studies—as well as the recent leak of documents known as the Panama Papers highlight—the U.S. is a favored place for incorporating shell companies used to hide stolen assets, dodge taxes, defraud Medicare, evade sanctions, launder drug money and sell illegal weapons around the world. In Iowa, you can form a company without revealing the identity of who ultimately owns or controls it.
Approximately two million corporations are formed in the U.S. each year—which is more than the rest of the world combined. Criminals often layer anonymous corporations, with one owning another and so on, to make it even harder for law enforcement to “trace the money” to figure out who is directing the company’s activity—i.e. the identity of the real criminal. This has been the case in crimes in Iowa as well.
Even if Iowa were to increase the requirements for incorporation, as long as other states allow anonymous companies to form, the problem will persist. We support a uniform, federal requirement that no corporation be anonymous as the only effective way to ensure a level playing field for states.
The increased accountability made possible by the bill would make it much harder for criminals to hide behind American shell companies to perpetrate schemes to defraud investors and other innocent Americans—or to defraud the public.
This bill would also provide law enforcement with a critical tool in the fight against financial crime and the financing of terrorism. The U.S. Department of Justice, U.S. Immigration and Customs Enforcement, the former District Attorney of New York and the Federal Law Enforcement Officers Association have all testified at Congressional hearings that the ability of criminals to wash their dirty money through anonymous U.S. shell corporations significantly impedes their efforts to fight terrorism and other serious crime in the U.S. and internationally.
We encourage you to take this commonsense step to make our corporate formation process transparent, which would make it harder for criminals to misuse American companies to facilitate illegal activities and stop the United States from being a dumping ground for dirty money.
Thank you for your commitment to this important issue.
Should you have additional questions about the legislation, we encourage you to reach out to Clark Gascoigne with the FACT Coalition.
Sincerely, the following Iowa law enforcement officials, faith leaders, small business owners and civic organizations,
• Paul H. Fitzgerald, Story County Sheriff, Nevada, Iowa
• Patrick B. Chambers, Hamilton County Attorney, Webster City, Iowa
• Rev. Julia Rendon, Crossroads United Church of Christ, Indianola, Iowa
• Rev. Chet Guinn, Methodist (Retired), Des Moines, Iowa
• Rev. Brian Carter, Methodist (Retired), Des Moines, Iowa
• Dr. William Klink, Professor Emeritus, University of Iowa, Iowa City, Iowa
• Dr. Darrell Wiens, Professor, University of Northern Iowa, Cedar Falls, Iowa
• Dr. Thomas Tritle, Professor, University of Northern Iowa, Cedar Falls, Iowa
• Dennis Bricker, Professor, University of Iowa, Iowa City, Iowa
• ReShonda Young, Owner, Popcorn Heaven, Iowa
• John Bartlett, Owner, I Work and Play, Iowa
• Ron Dinsdale, Owner, Midvale Pinacotheca Art Studio, Iowa
• Chris Petersen, Owner, Chris Petersen Family Farm, Iowa
• Linda Shepley, Co-Owner, Ritual Cafe, Iowa
• Denise Diaz, Co-Owner, Ritual Cafe, Iowa
• Joe Van Haalen, Owner, Smokin Joe's BBQ, Iowa
• Iowa Alliance for Retired Americans
• Iowa Main Street Alliance
• Iowa Fair Share
• Iowa Citizen Action Network (ICAN)
As well as the following concerned Iowa citizens:
• Jon Krieg 50312
• Barbara Dale 52101
• Jim Dale 52101
• Gaye Warner 52247
• Jason Badger 50211
• Natalie Terrones 50046
• Larry J. Bower 51108
• Doug Miller 50310
• Thomas J Persoon 52241
• Frank Belcastro 52001
• Thomas P. Gardner 52632
• Todd Lashway 52556
• Tony Jorgensen 50501
• Terry Lowman 50014
• Greta Anderson 50010
• Eloise Cranke 50317
• Melinda Arndt 52556
• Sandy Keller 52240
• Kent Wright 50702
• John R. Stone 50401
• Barbara Cunningham 51601
• Jeanne Stoakes 50702
• Bernardo Alayza Mujica
• Jon Hunstock 50010
• Audrey Hunstock 50010
• William Reedy 52210
• Susan E. Kolbe 50112
• Bob Jewett 50313
• R. Allen Hays 50613
• Stephen Tews 52577
• Jan Flora 50010
• Susan Benner 50010
• Ellen Roth 52556
• Margaret Weiner 50322
• Ryan Terrones 50046
• Francis Driscoll 50314
• Diane Pelz 50010
• Paul Jensen 50010
• Selden Spencer 50124
• Brenda Brink 50124
• John Cook
• Margaret Jaeckel 51503
• Kay Kopatich 50322
• Lloyd Matheson 52245
• Ellen Roth 52556
• Maria Dickmann 52806
• Patricia Nielsen 52402