In a New York Times letter, FACT’s Clark Gascoigne writes that Treasury’s plan falls short of what’s needed to combat the financial system’s role as a money-laundering haven.

This article was originally published by The New York Times.

To the Editor:

Re “Property Sales Get U.S. Scrutiny” (front page, Jan. 14):

The Treasury Department’s plan to scrutinize the secret companies buying real estate in New York and Miami is a welcome first step toward cleaning up parts of the real estate market, but it falls far short of what’s truly needed to combat the United States financial system’s role as a major money-laundering haven.

Anonymous shell companies are one of the primary vehicles for laundering the proceeds of crime, corruption, terror and tax evasion, yet the United States is the second easiest place in the world — next to Kenya — for a criminal to form an anonymous shell company to launder his money with impunity.

Nearly two million companies are incorporated in the United States each year, and not a single one is required to disclose the true, human person who owns or controls it when it is set up. Indeed, in some states, it’s easier to form a company than to obtain a library card.

A longstanding bipartisan proposal exists in Congress to peel back the secrecy behind these companies, helping to protect the American people from terror financing, fraudsters and drug lords.

Treasury could also do more. It could remove the longstanding exemption that relieves the real estate sector of any responsibility to know whom they are doing business with. It could also blunt the abuse of corporate secrecy by finalizing a long-stalled rule requiring financial institutions to verify the true owners of companies opening accounts at their banks.

The abuse of anonymous companies is a systemic problem. It’s time for Congress and Treasury to take meaningful actions.

CLARK GASCOIGNE

Interim Director, FACT Coalition
Washington

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This article was originally published by The New York Times.

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