Media Contacts: Zoe Reiter, Director of Civic Engagement at the Project On Government Oversight (POGO), [email protected]; or Caitlin MacNeal, Communications Manager at POGO, [email protected] or 732-757-7370
(WASHINGTON)—The National Defense Authorization Act just passed by the Senate with a veto-proof majority includes two historic anti-corruption reforms that will go a long way in reducing corruption in the United States.
One provision, the Corporate Transparency Act, mandates that certain companies report their true owners, known as “beneficial owners,” to the Financial Crimes Enforcement Network at the Treasury Department. This rule will prevent individuals from using shell companies to hide the true owners of a company.
A second provision requires all federal contractors to declare their beneficial ownership in a public database.
Together, these two measures are a big step in reducing the use of shell companies to facilitate fraud, tax evasion, money laundering, drug and human trafficking, and to threaten national security. Opioid traffickers use anonymous shell companies to launder money and hide their profits, evading enforcement and in turn fueling the opioid epidemic. Contractors for the U.S. government that use shell companies to hide their ownership have been accused of price gouging and improperly sharing sensitive military information.
Requiring companies to reveal their beneficial owners will make it harder for them to carry out corrupt acts and will help law enforcement track down those who attempt to launder money or defraud the government.
President Donald Trump should sign the bill and President-elect Joe Biden should implement these measures.
“This is an enormous step forward in the fight against corruption. We’ve been working for years to reduce the use of shell companies to defraud the American people and inappropriately secure sensitive government contracts, and Congress has finally followed through,” said Zoë Reiter, director of civic engagement at the Project On Government Oversight and executive committee member of the FACT Coalition.
Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that investigates and exposes waste, corruption, abuse of power, and when the government fails to serve the public or silences those who report wrongdoing.
We champion reforms to achieve a more effective, ethical, and accountable federal government that safeguards constitutional principles.