If it was one thing the Panama Papers release made clear, shell companies are a problem in places other than Panama, like here in the United States for instance. One intrepid reporter, “demonstrated on video that one of its collaborators was able to form a Delaware shell company for her cat. This took only a few minutes, $249 (via credit card), and required no identification documents at all. Similarly, lax regulations exist in Montana, Nevada, and Wyoming.” Indeed, the law firm from where the Panama Papers were leaked, Mossack Fonseca, even had a branch office in Nevada, which has subsequently closed.
These gaps have led to many charges around money laundering. This has been most publicly announced by the U.S. Treasury Department’s scrutiny of real estate deals in Manhattan, Los Angeles, and Miami, particularly involving Russian money. Congress, however, now might finally find the political will to do something about this problem which can allow a gap in money laundering laws in the United States. Five otherwise disparate U.S. Senators have introduced legislation to crack down on the introduction of dark money, through money laundering into the U.S. economy via shell corporation. The legislation would require states, where entities are incorporated, to obtain data on the true owners of corporations and to make that information available to U.S. law enforcement officials.
Is such legislation possible in the age of the Trump presidency or when there is a Secretary of the Treasury who “forgot” to disclose some $100 million in assets he held in shell corporations, during his confirmation hearings before the Senate? At this point it is not clear, but given the bipartisan support for the legislation, it would seem to have an opportunity for a more full hearing before both house of Congress. It reminds The Man From FCPA of a slogan from the 60s, The whole world is watching to see how the U.S. responds.