“Just the FACTs” is a round-up of news stories and information regarding efforts to combat corrupt financial practices, including offshore tax haven abuses, corporate secrecy, and money laundering through the financial system.
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State of Play
Lawmakers, National Security Experts, Law Enforcement, and Other Stakeholders Protest Gutting of the Corporate Transparency Act
FACT has joined diverse stakeholders from across the political spectrum in condemning the Treasury Department’s gutting of the Corporate Transparency Act (CTA), a critical anti-money laundering and national security law which seeks to end the use of anonymous shell companies by domestic and transnational criminals. These comments were submitted in response to an interim final rule issued by Treasury that effectively nullifies the CTA by eliminating reporting obligations for the vast majority of previously-covered entities.
In a statement, FACT executive director Ian Gary commented that “The widespread denunciation of Treasury’s illegal move recognizes and reaffirms a simple truth: destroying the Corporate Transparency Act will make Americans less safe.”
That sentiment was echoed across numerous official comments, including from national security experts and law enforcement organizations, who have long supported the CTA as an important tool in the fight against transnational cartels and hostile foreign regimes. In its comments, the National District Attorneys Association noted that “For those of us charged with protecting public safety and administering justice in our communities, the CTA has been a long overdue and vital tool to pull back the veil of anonymity that has enabled criminal networks to thrive.”
Numerous other commenters noted the ways in which Treasury’s interim final rule contradicts Congress’ intent in passing the CTA. Chief among these were Senators Sheldon Whitehouse (D-RI) and Chuck Grassley (R-IA) – two longtime champions of ownership transparency and original sponsors of the TITLE Act, the legislative precursor to the CTA – who wrote that the interim final rule “is inconsistent with the text and original policy goals of the CTA.”
Dozens of other stakeholders, including small business groups, national security experts, banks, and anti-corruption and environmental organizations also submitted official comments critical of Treasury’s interim final rule. A non-exhaustive list of submitters that commented in support of the full and faithful implementation of the CTA is included at the end of this publication.
Billions in Offshore Tax Breaks in House Tax and Spending Bill to be Considered by the Senate
As Senate lawmakers prepare to unveil their revisions to the House reconciliation bill, framing it under the banner of the administration’s “Made in America” agenda, the House package on which the Senate is building preserves and even expands $174 billion in corporate tax breaks that encourage offshoring domestic jobs and profits.
“Congress has the chance this year to fix a corporate tax code that effectively subsidizes moving jobs and profits overseas.” said FACT policy director Zorka Milin in a statement. “Raising the global minimum tax rate and eliminating offshoring incentives could generate hundreds of billions in revenue—and support real investment at home. Instead, lawmakers have so far chosen to enshrine harmful tax incentives for outsourcing while ballooning the deficit and cutting essential services that American families rely on.”
FACT has long championed reforms to raise substantial revenue and end offshoring incentives in the tax code, including through the No Tax Breaks for Outsourcing Act, led by Rep. Doggett and Sen. Whitehouse, which would equalize the tax rate paid by U.S. multinationals on their domestic and foreign income, among other vital reforms. On Wednesday, new legislation was introduced by Senators Wyden, Warner, Warnock, and Welch to end the so-called “round-tripping” loophole used by major pharmaceutical companies to mischaracterize profits from their U.S. sales as foreign and avoid U.S. taxes. The current tax code not only tolerates these dodgy tax games, it actively encourages them. Also this week, Representative Ro Khanna unveiled his ambitious “Progressive Deficit Reduction Plan,” which would lower the deficit by $12 trillion, including by raising $1 trillion in new revenues by effectively taxing the foreign profits of U.S. multinationals.
The fate of the House bill’s “revenge tax” provision – the proposed section 899 – is also in question as Senate talks ramp up. Section 899 targets certain foreign companies and individuals in the U.S. for higher, punitive taxes, but in reality amounts to self-sabotage that puts at risk thousands of domestic jobs and growth from foreign investment. According to Milin, “Rather than defending U.S. tax sovereignty as its proponents claim, this misguided policy is standing up for tax havens that have long been used by American multinational corporations to dodge taxes at home and abroad.”
Latest from FACT
The Big, Beautiful Bill has a Big Illicit Finance Problem
A new 3.5 percent tax on money sent from the U.S. to other countries by non-U.S. citizens (outgoing remittances) passed in the House tax and spending package will only serve to drive immigrants toward less secure, informal money transfer services, write FACT’s Julia Yansura and Zorka Milin. Survey data suggests that more than half of all U.S. immigrants could change the way they send money home if a remittance tax were implemented, drastically reducing the revenue-raising potential of such a tax and undermining U.S. anti-money laundering efforts.
From the blog: “Such a tax would be regressive, targeting working-class immigrant communities, and an administrative nightmare to implement, while raising relatively little in taxes. It would also undermine 25 years of progress in formalizing these financial flows.”
FACT in the News
New York Times: How to Hide a 350-foot Megayacht
FACT executive director Ian Gary was quoted in New York Times Magazine on the Trump Administration’s ongoing rollback of anti-corruption policies vital to efforts to effectively detect and freeze the assets of sanctioned Russian oligarchs.
“The pace of change and unraveling of a lot of the protections and safeguards related to dirty money coming into the United States has been pretty dizzying,” said Gary.
As the piece notes, opaque financial systems “not only allow Kremlin allies to disguise their wealth but also enable international drug cartels to operate with impunity, corrupt officials to launder money from bribes into luxury real estate and the ultrawealthy to avoid paying taxes.”
Tax Notes: Business Advocates Hope for Senate Shakeup on International Tax
FACT policy director Zorka Milin was quoted in Tax Notes’ coverage of ongoing negotiations surrounding the Senate’s tax and spending package, including reported consideration by lawmakers of expanded tax breaks for the foreign profits of major multinational corporations.
One such pro-corporate tax reform package reportedly under consideration in the Senate, the International Competition for American Jobs, is “a dream come true for the corporate lobby,” according to Milin. “It amounts to a big tax cut for foreign profits of American corporations, and also dramatically expands the FDII tax break, which already costs taxpayers tens of billions of dollars annually and benefits only a handful of hyper-profitable companies,” she said.
Tax Notes: Investors Seek Tax Transparency at Merck
Last year’s FACT-led investor petition calling on the SEC to require enhanced corporate tax disclosures was cited by Tax Notes in their coverage of a related shareholder proposal at American pharmaceutical giant Merck.
From Our Members and Allies
Armando.info: A Venezuelan gold smuggling route was exposed in the Cayman Islands
A new investigation from Joseph Poliszuk, co-editor and co-founder of Armando.Info, exposes the financial networks used to smuggle illegal gold from Venezuela to international markets, including alleged involvement from U.S. companies and U.S. financial institutions. By tracking invoices, court cases, and bank transfers, Poliszuk was able to reconstruct the specific route taken by the illegal shipments of gold.
From the article: “Five countries, eight companies, and one small plane seemed to be sufficient to launder Venezuela’s blood gold, but then something went wrong on a small Caribbean island.”
FDD: Our enemies depend on anonymity. To defeat them, we must unmask them
A new op-ed from Josh Birenbaum, deputy director of the Center on Economic and Financial Power at the Foundation for Defense of Democracies, outlines how Treasury’s rollback of CTA enforcement undermines national security and law enforcement efforts.
From the op-ed: “Transparency tools such as the CTA actually supercharge American power… America’s enemies, terrorist financiers, drug traffickers, or bribe-giving officials of the Chinese Communist Party, all depend on secrecy. As long as law enforcement is diligent and resourced, as it is in America, crime cannot occur openly. Unmask the people and the money behind criminal and corrupt behavior, and our enemies are weak, exposed, and easy to jail.”
MSA: Op-ed: The Corporate Transparency Act levels the playing field for small businesses
Read a new op-ed from Richard Trent, the executive director of FACT-member Main Street Alliance, explaining how beneficial ownership information reporting helps small businesses compete on an even ground.
From the op-ed: “Weakening or failing to enforce the CTA would send a troubling message that corruption is tolerated, that those willing to cut corners will continue to get ahead, and that ethical small business owners will be left behind.”
The Sentry: The War on Trees – How Illegal Logging Funds Cartels, Terrorists, and Rogue Regimes
Read the Sentry’s latest investigation detailing how illegal logging fuels terrorist groups, criminal organizations, and authoritarian regimes. This publication follows up on another recent investigation from the Sentry delving into the role of the illicit gold trade in funding the same nefarious actors.
From the investigation: “As natural resources are depleted, competition over the limited forests that remain will intensify, the value of logs will increase, and the proceeds will continue to perpetuate conflicts and enrich bad actors.”
Tax Justice Network: Financial Secrecy Index (2025)
The U.S. once again topped the Tax Justice Network’s annual Financial Secrecy Index, which ranks countries’ complicity in helping individuals and companies hide their finances from the rule of law. This ranking comes on the heels of the Trump administration’s rollback of the Corporate Transparency Act and other key anti-corruption and anti-money laundering initiatives, further worsening the United States’ role as, in the words of former Treasury Secretary Janet Yellen, “perhaps the best place to hide dirty money”.
Recent and Upcoming Events
(DATE TBD) Fourth International Conference on Financing for Development – Safeguarding Domestic Resources and Corruption-Proofing the Financing for Development Agenda: Sevilla and Beyond
FACT is co-sponsoring an official side event at Fourth International Conference on Financing for Development. The event, titled “Safeguarding Domestic Resources and Corruption-Proofing the Financing for Development Agenda: Sevilla and Beyond”, will focus on the central role of anti-corruption in sustainable development financing, and explore ways to translate commitments into actionable reforms to strengthen integrity, transparency, and accountability.
Keep an eye on future editions of Just the FACTs for more information on how to tune in.
Appendix: List of Commenters in Support of Full and Faithful Implementation of the Corporate Transparency Act
- Lawmakers
- Law Enforcement
- National Security
- Industry Groups
- Tax and Transparency Groups
- Financial Accountability and Corporate Transparency (FACT) Coalition
- Citizens for Responsibility and Ethics in Washington (CREW)
- Jubilee USA
- Open Ownership
- Tax Law Center at New York University
- Transparency International (TI) U.S.
- 57 Global Transparency International Chapters
- Eight Environmental Organizations, including:
- Earth League International U.S.
- Environmental Investigation Agency
- International Wildlife Trust
- Climate Rights International
- Center for Climate Crime Analysis
- The Sentry
- Global Witness
- Friends of the Earth U.S.
About the FACT Coalition