The investigation into the “Panama Papers” could increase the motivation for Congress to pass legislation that would require states to collect information about the true owners and controllers of shell companies, supporters of the bill said.
“This definitely raises the pressure for Congress to act,” said Clark Gascoigne, interim executive director of the Financial Accountability and Corporate Transparency (FACT) Coalition.
Brian Kindle, executive director of the Association of Certified Financial Crime Specialists, said the papers “might give a boost” to the issue of corporate transparency in Congress.
The Panama Papers are leaked documents from a Panama-based law firm, Mossack Fonseca, that sets up anonymous shell companies for clients. An investigation by the International Consortium of Investigative Journalists and more than 100 news outlets found that the documents contain information about 140 politicians and public figures around the world.
According to an academic study, the United States is the second-easiest country to obtain an untraceable shell company from incorporation services.
It is particularly easy to incorporate an anonymous corporation in Delaware, Wyoming and Nevada.
The European Union has passed a directive to require its members to create a registry of information on the beneficial owners of shell companies. But the U.S. hasn’t taken similar action.
Legislation to ensure the disclosure of beneficial owners in the U.S., called the Incorporation Transparency and Law Enforcement Assistance Act, has been floated for several years in Congress.
The Senate version of the bill was most recently introduced this year by Sen. Sheldon WhitehouseSheldon WhitehouseDemocrats draw red lines in spending fight What Republicans should demand in exchange for raising the debt ceiling Climate hawks pressure Biden to replace Fed chair MORE (D-R.I.), and the House version was introduced this year by Rep. Carolyn Maloney (D-N.Y.). Rep. Peter King (R-N.Y.) is a co-sponsor of the House bill.
The bill hasn’t moved over the years in part because of opposition from the Delaware congressional delegation and the National Association of Secretaries of State, Gascoigne said.
Still, there has been renewed interest in the bill lately, particularly by members of the House Financial Services Committee, because of a House task force on terror financing. A first step would be for the committee’s chairman, Rep. Jeb Hensarling (R-Texas), to hold a vote on the bill, Gascoigne said.
He also pointed out that Democratic presidential candidate Bernie SandersBernie SandersIn Washington, the road almost never taken Don't let partisan politics impede Texas' economic recovery The Hill's Morning Report - Presented by Alibaba - Democrats argue price before policy amid scramble MORE and Republican presidential candidate Donald TrumpDonald TrumpGraham says he hopes that Trump runs again Trump says Stacey Abrams 'might be better than existing governor' Kemp Executive privilege fight poses hurdles for Trump MORE are doing well in the polls because people feel that the global financial system is not working for them.