US corporate secrecy

Posted on November 4 2009

The following could not have come at a better time to endorse the findings of the Financial Secrecy Index:

COMMITTEE CONSIDERS LEVIN-GRASSLEY-MCCASKILL BILL TO END U.S. CORPORATE SECRECY

WASHINGTON — Legislation introduced by Sen. Carl Levin, D-Mich., to stop the formation of U.S. corporations with hidden owners will be the subject of a Thursday hearing before the Senate Committee on Homeland Security & Governmental Affairs.

The Levin-Grassley-McCaskill bill, S. 569, the Incorporation Transparency and Law Enforcement Assistance Act, would require states to collect the names of beneficial owners of the corporations and limited liability companies formed under their laws, and, if presented with a subpoena or summons, provide that information to law enforcement.  Now, the states form nearly 2 million corporations each year without requesting the names of the natural persons behind them.  That practice has allowed terrorists, money launderers, tax evaders, and others to misuse U.S. corporations to further their wrongdoing, and impeded investigations by U.S. and international law enforcement agencies.

Among the cases to be discussed at Thursday’s hearing is that of Viktor Bout, a notorious arms trafficker known as the “Merchant of Death,” who apparently used at least a dozen U.S. corporations formed in Texas, Delaware, and Florida to facilitate his activities.  Mr. Bout is under indictment in federal court for conspiracy to kill U.S. nationals, the acquisition and use of anti-aircraft missiles, and providing material support to terrorists.

“It should worry everyone that our state incorporation laws allow people like Viktor Bout to acquire U.S. corporations without having to divulge their ownership,” Levin said. “Not only does our failure to get owner names make it easier for wrongdoers to use the corporate form for illegal purposes, but it makes it more difficult for the United States to press other nations to reform their secrecy practices.”

Some at least recognise the enormous problem of secrecy in the USA.

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3 Responses

  1. Stephane Sullivan says:
    November 4 2009 at 8:26 pm

    Dear Richard,

    Thank you for everything you are doing. A few days ago I saw a very allarming french documentary on tax havens. This led me to your website and to the Levin bill. I tried to figure out if the bill had passed. Everything I read seemed to indicate that a bill prohibiting private citizen tax evasion was going to be approved, but that the corporate tax evasion portion had been shelved. This portion of the overall bill named FACTA had been sponsored by Levin, and contained a controversial recommendation that the worst tax havens be blacklisted.

    Your article seems to indicate that Levin’s bill is still alive. Can you confirm this? Do you think that Obama has the desire to do away with corporate tax evasion as he stated during the campaign? Is the problem the people he has around him? Is he free to act? And can we help as citizens? Is there a political organization that is supporting Levin’s ideas, which interested citizens could join?

    Many thanks

  2. Richard Murphy says:
    November 4 2009 at 11:28 pm

    Stephanie

    The Bill is alive

    I am not especially optimistic of its chance of success

    I do think Obama has back-tracked to some degree

    The Tax Justice Network is the organisation to join. We really are making a difference and do create real pressure for change. Google it

    Thanks!

    Richard

  3. Stephane Sullivan says:
    November 8 2009 at 7:19 am

    @Richard Murphy
    Thank you Richard. I checked out TJN’s website and its list of activities. Senator Levin published a press release on Nov. 5 reaffirming that the bill was in the works.