December 12, 2020
Pearl River Big props to Congresswoman Carolyn Mahoney (D-NY) who has been resubmitting the Corporate Transparency Act every session of Congress since 2009 for staying on the case until the Act passed as part of the bundle in the defense appropriation bill that finally cleared the Senate 84-13 on a bipartisan, veto-proof vote. The headlines on the bill had been all about Trump of course, as usual. He had threatened to veto the bill because it didn’t include an attachment he wanted to take away the liability protection for tech companies, where he might have been on the right side, and because the bill supported the military’s past due initiative to rename all of its bases that honor Confederates, where he was absolutely wrong and a racist to boot. Getting the Corporate Transparency Act through the chute on this package may be the gift that keeps giving long after the rest of this is forgotten.
Mahoney’s original push sprang from trying to uncover who was behind Manhattan real estate ownership. Limited liability corporations owning the properties were often concealing ill-gotten gains for the rich, royalty, and criminals of all stripes, and obviously jacking prices and putting gentrification on steroids. Some countries along with states like Delaware have made this a business model by offering anonymity to all manner of individuals and corporations. Interviewing Alex Cobham, the head of the UK-based Tax Justice Network, on Wade’s World, he had underlined this issue, since in their survey the US only trailed the Cayman Islands globally as the most secret haven for such mischief.
This is a boon for all of us involved in “following the money” in the fight for social justice, since LLCs and hidden ownership are often our bane, particularly in tracking real estate, but really in all corporate research, especially given the growing, grasping tentacles of Wall Street and private equity. The ACORN Home Savers Campaign ran into this problem repeatedly in dealing with predatory companies like Vision Property Management and Harbour Porfolio among scores of others that were involved in various land contract schemes. It was only a Wisconsin lawsuit that opened the window on dozens of VPM LLCs that we had not been able to find looking city by city at the issue. The same issue is confronting the ACORN Tenants’ Union in Atlanta where tenants are facing massive eviction threats from one housing complex after another, represented by various management companies, with the ownership hidden behind the veil of thousands of LLCs.
The relief won’t be immediate, but it should be permanent. As reported by the Washington Post,
The law requires anyone registering a new company to disclose the name, address and date of birth of the real owners, and an identification number for each owner, such as a driver’s license or passport number. Corporations and LLCs that already existed before the law’s adoption must disclose their ownership information to the Treasury Department within two years.
Two years is forever for tenants and the rest of us, but, finally, we can truthfully say that these well-cloaked specialists in hiding the hand, “can run, but they can’t hide.”