Press

Bipartisan Momentum Builds as Senators Introduce Measure to Curb Money Laundering, Terror Financing

Sen. Wyden and Sen. Rubio’s “Corporate Transparency Act” — Companion to Rep. Maloney and Rep. King’s H.R.3089 — Would End Incorporation of Anonymous Companies

WASHINGTON, D.C. — Momentum continued to build towards curbing criminal money laundering and terror finance Thursday as Sens. Ron Wyden (D-OR) and Marco Rubio (R-FL) introduced the Corporate Transparency Act (S.1717), the Senate companion to a bipartisan House bill (H.R.3089) aimed at ending the abuse of anonymous shell companies.

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Bipartisan Bill Seeks to Secure Airways from Criminals and Terrorists

FACT Coalition Supports ‘Aircraft Ownership Transparency Act of 2017’

WASHINGTON, D.C. — A bipartisan group of lawmakers introduced a bill Friday to secure the U.S. aviation system from criminal actors and terrorists hiding behind anonymous shell companies, in a move welcomed by the Financial Accountability and Corporate Transparency Coalition.

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Just the FACTS: July 27, 2017

Over the past several decades, anonymous shell companies have been at the heart of heinous crimes, including cases of grand corruptionhuman trafficking, and even the facilitation of the opioid epidemicDidier Jacobs of Oxfam America highlighted some of the blights of anonymous companies in a recent blogIn it, he describes how drug lords, corrupt politicians, and human traffickers are able to perform illegal acts while hidden from justice by a veil of anonymity. With shielded identities, criminals can effectively function above the law.

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Encouraging Signs for a Possible U.S. Legislative Crackdown on Anonymous Companies

By Gary Kalman

A little over a year ago, the International Consortium of Investigative Journalists (ICIJ) released the Panama Papers, a treasure trove of information and a window into the world of financial secrecy. In some ways, much of what the Panama Papers revealed was already well known. Previous estimates put the amount of money hidden in offshore secrecy havens somewhere between $8 trillion and $32 trillion. In 2015, The New York Times published an impressive five-part series on the use of anonymous shell companies to purchase prime real estate in New York City. Prior to that, the U.S. Justice Department filed a lawsuit (which they just won on June 29th) to force the forfeiture of New York property secretly owned by the government of Iran in direct violation of economic sanctions. And so on. Yet it is hard to deny the captivating intrigue of the specific stories in the Panama Papers involving Russian kleptocrats, world leaders, athletes, movie stars, and others.

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Bipartisan Bills Target Criminal Money Laundering, Terror Financing

Transparency Measures Have Broad Support from Financial Institutions, Law Enforcement, and Anti-Corruption Advocates

WASHINGTON, D.C. – Bipartisan pieces of legislation introduced on June 28, 2017 aim to crack down on one of the prime enablers of criminal money laundering and terrorist financing — the abuse of anonymous shell companies.

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Just the FACTS: June 15, 2017

For the second time, Wells Fargo was found liable for a tax penalty in connection with an abusive tax shelter.  This points to a broader trend where companies’ abusive tax schemes are being exposed to increasing public discontent.  In the case of Wells Fargo, a jury in Minnesota had previously nixed $350 million in foreign tax credits finding that they “lacked both economic substance and a non-tax business purpose.” Now, a federal court has found them liable for a 20% negligence penalty from the IRS. The court’s decision is yet another example that the tax gimmicks employed by multinationals to inflate profits are becoming riskier.

In a blog, FACT’s Jacob Wills explained the current climate around tax fairness, “Scandals have shaken public confidence in the integrity and fairness of the tax system at a time when tightening budgets and increasing deficits are leading to calls for austerity and scaling back on long relied upon public services.”

It should be no surprise that tax avoidance schemes face increased scrutiny, a recent report suggests that the ultra-wealthy are dodging more in tax than many had previously estimated.   Economists Annette Alstadsæter, Niels Johannesen, and Gabriel Zucman took data from two tax haven leaks — the Panama Papers and Swiss leaks — in order to get more accurate estimates of tax evasion.  Their findings: the ultra-rich — on average — evade about 30% of their due taxes, compared to the average evasion rate of 2.9%.

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Just the FACTs: May 19, 2017

Profits booked offshore are growing at an even faster pace than previously predicted. Earlier this month, Apple made waves when it disclosed that of its more than $250 billion in cash worldwide, $239 billion is kept offshore.  Some of the growth in cash booked offshore is likely due to the perception that Congress and the administration are inching ever closer to a deal that would allow these companies to return the money at a steep discount.

One plan presented by Democratic Representative John Delaney equates to a corporate hand-out of nearly $550 billion.  In a recent blog, the Institute for Taxation and Economic Policy analyzes the plan disguised as a pay-for for infrastructure spending.  There is no doubt with a backlog of $836 billion in much-needed repairs, investments in infrastructure need more funding. However, as ITEP argues, this plan will only make the problem of inadequate revenue worse.

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