The Free Press, Mankato, MN

Editorials

June 16, 2013

Business should be transparent

Why it matters: Shell corporations escape scrutiny and responsibility, and defaud taxpayers and business alike

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There are businesses in the business of setting up dummy corporations. Levin’s office pointed out advertisements where companies were selling the use of dummy corporations that had employer I.D. numbers and a “four year history.” These kind of businesses just invite fraud and abuse.

Other experts say the U.S. shell corporation law is allowing “bad guys” to use doing business in the U.S. as a show of “legitimacy”

Jack A Blum, chairman of the Tax Justice Network, said Delaware, Montana, Nevada and Wyoming at the states these shell target because they have the loosest corporation rules. Tens of thousands of the corporations have been set up, he said.

“We know the bad guys are selling the U.S. as a place to set up companies,” he told The New York Times.

There have been numerous bipartisan efforts for the last decade to incorporate some kind of requirement into state laws governing corporate registration. Levin sponsored these bills with people like former Sen. Norm Coleman of Minnesota and Sen. Charles Grassley of Iowa.

Reports were offered showing $14 billion to $18 billion of suspicious transactions going through U.S. shell corporations. The U.S. Department of Justice has fielded thousands of requests from our international partners for information on who owns corporations suspected in money laundering and other fraud. We cannot help them because we don’t know who owns thousands of these corporations set up in the U.S.

In 2008, Sen. Barack Obama co-sponsored Levin’s efforts. We think he should now embrace them again.

Setting up a corporation gives the owners limited liability. It’s a way the government gives rights to businesses and even helps reduce their risk by allowing for liability limits. That is a privilege. Those who would set up shell corporations to hide ownership abuse that privilege at the expense of others who must comply with the law.

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