A group of international nongovernmental organizations wrote to Ranking Member Patrick McHenry and Chairwoman Maxine Waters to declare their support for the Corporate Transparency Act, which is scheduled for mark-up on June 11th. The full letter can be read below or downloaded here.
June 7, 2019
The Honorable Maxine Waters
U.S. House Committee on Financial Services
2129 Rayburn House Office Building
Washington, D.C. 20515
The Honorable Patrick McHenry
U.S. House Committee on Financial Services
4340 O’Neill House Office Building
Washington, D.C. 20024
RE: H.R.2513, “Corporate Transparency Act of 2019”
Dear Chairwoman Waters and Ranking Member McHenry:
We are writing to express our strong support for the H.R.2513, “Corporate Transparency Act of 2019”, which is scheduled for markup on June 11 and which would require American companies to disclose the identity of the actual people who own or control them (often called the “beneficial owners”).
We are the leaders of nongovernmental organizations delivering or advocating for both humanitarian and development assistance in countries affected by war, natural disasters, and chronic poverty. We and those we serve rely on the support of millions of generous Americans.
Based on decades of experience in international development, we have concluded that incorporation transparency is essential to alleviate poverty in the world. Corruption, tax evasion, arms trafficking, and human trafficking are scourges that afflict developing countries. These crimes have in common the fact that the trail of investigations into them often ends with anonymous shell companies.
Corruption is one of the principal barriers to economic development and poverty alleviation.1 Not only does it waste public resources that could otherwise fund schools, clinics and other social services, but it also discourages private investment and fosters distrust between citizens and their government, which makes countries ungovernable and prone to civil strife. The World Bank has documented 150 cases of grand corruption. 102 of the anonymous shell companies that enabled these crimes were registered in the United States – more than in any other country.2
Almost a third of rich Africans’ wealth – about $500 billion – is estimated to be held offshore, much of it undeclared to tax authorities, which may cost African governments $14 billion a year.3 That is equivalent to the sums needed to pay for healthcare to save the lives of 4 million children and to employ teachers and allow every African child to go to school.
At least $2.2 billion worth of arms and ammunition was illegally imported by countries under arms embargoes between 2000 and 2010,4 fueling civil wars that destroy lives and livelihoods and set countries decades backward on their development paths. Viktor Bout, known as the Merchant of Death, used a global network of shell companies, including twelve incorporated in U.S. states, to become the world’s largest arms trafficker before being captured5
We witness horrific stories of refugees fleeing war zones only to fall prey to human traffickers.6 Anonymous companies from Kansas, Missouri and Ohio were instrumental to trick victims from overseas in a $6 million human trafficking scheme.7
At their Summit in Lough Erne (United Kingdom) in 2013, G7 members including the United States committed to make progress to ensure that both tax and law enforcement authorities in all countries where companies operate are able to find out who really owns them. Other countries have delivered on their promises, and last year the British government has even committed to extend incorporation transparency to its overseas dependencies including notorious tax havens like the British Virgin Islands, host of the most companies cited in the Panama Papers. The United States is a prime location for anonymous companies, providing them with a veneer of respectability as well as access to a deep financial system and strong rule of law. It is high time that our country delivers on this international commitment.
We thank you for your attention and your commitment to combatting illicit finance. If you would like more information, please contact Linda Delgado at firstname.lastname@example.org.
David Beckmann, President
Bread for the World
Marie Clarke, Executive Director
Tom Hart, North American Executive Director
The ONE Campaign
Eric LeCompte, Executive Director
Jubilee USA Network
Abby Maxman, CEO
- Transparency International, “Corruption: Cost for Developing Countries”,
- World Bank (2011) “The Puppet Masters”. https://star.worldbank.org/star/publication/puppet-masters
- Oxfam, “Paradise Papers: The Hidden Costs of Tax Dodging”, https://www.oxfam.org/en/even-it/paradise-papers-hidden-costs-tax-dodging
- Oxfam, “Saving Lives with Common Sense”, https://www.oxfamamerica.org/explore/research-publications/saving-lives-with-common-sense/
- Global Witness, “The Great Rip-Off”, http://greatripoffmap.globalwitness.org/#!/case/57938
- Oxfam, “You Aren’t Human Anymore”, https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/mb-migrants-libya-europe-090817-en.pdf
- Global Witness (Op. Cit.)