As a small business owner, I do my best to ensure that my business provides the highest quality products and services possible. I also know that my reputation in my community is associated both with the quality products and services we provide, but also with the way we do business. My customers know who I am, and they know that I will stand behind my business. To me this transparency is part of the responsibility I have to my customers and community. I believe that all business owners should have the same responsibility to their customers and communities.
That is why I was surprised to learn that some business owners prefer to hide their identities behind anonymous shell corporations. Most states collect less information from people forming new businesses than is required to obtain a driver's license or to register to vote. Today someone can incorporate a company without ever saying who benefits from its existence or ultimately controls its activities.
While I'm sure that most business owners are focused on building strong, profitable and successful businesses, we also know that anonymous shell corporations are often used to conduct criminal activities, like money laundering or human trafficking. Last September, Global Witness released a report called The Great Rip Off. The report analyzed a wide range of crimes and predatory behavior across the U.S. and found that they all had two things in common: all were carried out by the anonymous owners of shell corporations, and authorities are spending huge amounts of time and money trying to stop them.
Criminals often layer anonymous corporations, with one owning another, 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.
Congress could easily fix this problem, making it more difficult for criminals to hide behind anonymous corporations. The Incorporation Transparency and Law Enforcement Assistance Act would bring an end to the abuse of anonymous shell corporations by requiring companies to disclose information about the real people who own or control them (often called the "beneficial owners"). This information would enable law enforcement to more effectively and efficiently conduct investigations to combat financial crime, as they would have access to important information about the ultimate owners of companies.
Our own Senator, Charles Grassley, co-sponsored this bill in Congress's last session. I'm hoping that we can once again rely on his leadership again in shepherding the Incorporation Transparency and Law Enforcement Assistance Act through his committee and all the way to the President's desk this year.
Young is the Owner of Popcorn Heaven and the Operations Manager of Alpha Express, Inc in Waterloo, Iowa. She is also on the National Executive Committee of The Main Street Alliance, a national network of small business coalitions working to build a new voice for small businesses on important public policy issues. The Main Street Alliance is a member of the FACT Coalition.
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