Shell Companies, Secrecy and the U.S.

Global Witness, has several experts available to talk about these new revelations: contact Andy Stepanian, 001.631.291.3010, [email protected]. 

The recent exposé by the International Consortium of Investigative Journalists and their media partners have once again shown the insidious role that tax havens, corporate secrecy and shell companies play in aiding widespread crime, corruption and violence. These threaten the safety, security and well-being of people around the world.

What’s less well known is that, despite stereotypes portraying the problem of tax havens and shell companies as an ‘offshore’ problem, this is a big and homegrown issue in the U.S. as well.

• Global Witness’ investigations, including the groundbreaking undercover work profiled by the 60 Minutes program, Anonymous, Inc. in January, show that the U.S. is a critical player in this global web of secrecy.  

• The U.S. is one of the easiest places to set up an anonymous shell company to move ill-gotten gains around the world. It’s also one of the most popular places to do so for the criminal and corrupt.

• Examples (below, in Global Witness’ The Great Rip Off report, and on our on-line interactive map) show how these anonymously owned companies are what unite all crimes that generate money.

Anonymous companies have been created  in the U.S. to carry out questionable or illegal activities that harm our national security, taxpayers, vulnerable populations, businesses, poor countries, and more.  A few examples include:

• National Security: The Iranian government used an anonymous New York company to conceal its ownership of a 5th Avenue skyscraper, in direct breach of sanctions.

• Crime: The biggest of Mexico’s drug cartels used an anonymous Oklahoma company in a scheme to launder millions of dollars of drug money into the United States.

• Tax Evasion: Switzerland’s oldest bank, Wegelin, closed in January 2013 after it pleaded guilty to conspiring to help American clients hide more than a billion dollars from the U.S. tax authorities. The bank relied on anonymous companies and foundations incorporated around the world to facilitate this massive tax evasion scheme.

• Dark Money:  Anonymous companies have been used to make six-figure contributions to super PACs backing nearly every major presidential candidate this election cycle. A million dollar contribution by a pop-up anonymous company to the Romney-backing Restore Our Future PAC spurred groups to request an FEC investigation. And, a 2012 report found that anonymous corporations contributed nearly $17 million to super PACS in 2012, nearly 17% of the total funds raised by businesses for super PACs that election cycle.

Time for Action: Global Witness is playing a leading role in a national movement to end the corporate secrecy that allows U.S. companies to be hijacked as getaway cars for criminals and other illicit actors.

• From April 11-13 faith leaders, small business owners, voices from law enforcement and other community activists from over 25 states will gather in Washington, DC to call on Congress to pass legislation that would end anonymous companies.