If you want to know who owns our company, and you have an Internet connection, all you need to do is go to our website.

As a small manufacturing business, having direct relationships with our customers is an important way for us to provide high quality products and services. We’re also committed to transparency and accountability in our operations; in keeping with these values, we choose to publish our company’s ownership information.

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But we didn’t have to be that vocal about it.

As we saw with last month's Panama Papers leak, setting up anonymous companies in the British Virgin Islands, Panama, or the Bahamas is quite easy, if you have some money and a savvy law firm. But to acquire this kind of anonymity, I really didn't even need to leave my own backyard. 

There’s a sad similarity between Mossack Fonseca’s favorite spots and almost every single state in the U.S.—the ease with which you can open a company without having to provide any information on the company’s beneficial owners—the real people ultimately in control or benefitting from the company.

In the U.S., the entire incorporation process often takes minutes, but that’s not the main issue. The problem lies in the fact that states are failing to collect the right information needed to protect American businesses and safeguard our economy.

The ability to incorporate secretly in the U.S. has enabled criminals to carry out all sorts of crimes—from defrauding school districts to laundering drug money. In one case, a U.S. Lieutenant Colonel passed on information to a business owner and contractor to create the ‘perfect’ bid, and proceeded to steal more than $20 million from taxpayers and Afghan commando troops. They used anonymous companies created ​here in Virginia where my business operates, and in Massachusetts, to hide the money.

Thankfully, I haven’t personally encountered anything that nefarious, but I have seen how this lack of transparency can affect our country’s largest purchaser: the United States Government, which spends hundreds of billions of dollars in contracted services each year. As a long-time supplier to the government, our company understands the ins and outs of the federal procurement process better than many. It was with this knowledge that we chose to end our contract with the government last September, after growing disillusioned with a system that, despite some progress, still seems to hold price as the primary arbiter of “best value” for taxpayer dollars.

Let me be clear: I support and, in fact, enjoy a competitive business environment. It sparks innovation, fuels growth, and can help ward off unfair practices like monopolies. But responsible business is about more than competition; it requires genuine transparency and accountability—a standard we must, and can, achieve.

Currently, like every state around the country, the Federal government doesn’t consistently require even the most basic information on who really owns a company it goes into business with. This opens the door to questionable supply chains and a whole host of other unknowns, including bad actors hiding behind anonymity, using their companies as a tool to defraud the government, other businesses, and, most importantly, taxpayers.

Over many years, and in strikingly different industries, as a federal contractor, I’ve encountered shell companies as a part of competitors’ business structures. Even with solid competitive analysis, it’s sometimes impossible to determine who really owns a competitor’s business entities or its supply chain partners. This anonymity leaves the system susceptible to abuse and fraud that can cost taxpayers millions and undermine legitimate businesses that thrive on a level playing field.

So how could we increase transparency in the Federal procurement process?

One very simply step would be to require prospective federal contractors to provide beneficial ownership information as part of the bidding process. We’ve taken this basic and important step to tell you who is behind our company, and we invite other business owners to join us.

This idea is gaining traction elsewhere, too.

Recently, the World Bank committed to examining ways to collect and publish this type of information for companies that participate in World Bank-financed contracts. And a bipartisan group of legislators from the U.S. House and Senate recently introduced a bill that would require beneficial ownership disclosure for any company incorporated in the U.S.

If a company is unwilling or unable to document its true owners, should we really be spending taxpayer’s money on their goods or services in the first place? 


Crystal A. Mario is Founder and CEO of Rivanna Natural Designs, Inc. in Charlottesville, Va.