Congresswoman Carolyn Maloney is pitching a bill on Capitol Hill that will put an end to shell companies across the United States, and possibly alleviate some of the issues facing everyday New Yorkers in an inflated housing market.
The main objective of the bill, however, is national security exemplified in the history of 650 Fifth Ave., once owned by the Iranian government and used to launder money for the benefit of terrorism groups.
“It’s not owned by the government of Iran anymore. It’s owned by a private U.S. company, but for many years, Iran was able to circumvent U.S. sanctions and launder their money, right here, in the US financial system,” Maloney said. “Now, people ask how did they do this? They used two anonymous shell companies, both formed here in the United States that hid their ownership. Fortunately the era of anonymous shell companies is almost about to end.”
The solution, according to Maloney, is as direct as requiring all companies to disclose their beneficial owners to the U.S. Treasury Department at the time when an LLC is established.
Included in National defense Authorization Act of 2021, Maloney said existing companies will be required by law to identify their owners as well.
“If you drive through Midtown Manhattan at night, you’ll see entire buildings that don’t have any lights on. That’s because no one lives there,” Maloney said. “They’re really bank accounts and they’re purchased to hide money and when kleptocrats can no longer hoard their money in real estate in New York, that limits the availability of housing. So my bill will also drive down the cost of housing in New York.”
This is not the first time Maloney has attempted to curb the use of shell companies.
In 2009, similar legislation was introduced under the name Incorporation Transparency and Law Enforcement Assistance Act. Some variation of the bill has been introduced in the chamber of every subsequent congress since then including the Corporate Transparency Act of 2019.
Though the bill has passed in congress, it has seen no such success in the senate having been held up in the Committee on Banking, Housing and Urban Affairs since 2019.
