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Bill Targets Shell Companies Identified in '60 Minutes' Piece - Broadcasting & Cable

Bill Targets Shell Companies Identified in '60 Minutes' Piece

Investigation reveals ease of sheltering possibly ill-gotten gains
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A day after CBS' 60 minutes aired a story, Anonymous, Inc., about New York law firms talking about how to move questionable assets to avoid having their owner detected, legislation is being introduced in Washington to try and crack down on the anonymous companies that facilitate the practice.

"Tonight, with the help of hidden camera footage, we're going to show you how easy it seems to have become to conceal questionable funds from law enforcement and the public," CBS' Steve Kroft said in introducing the piece.

The 60 Minutes story, which aired Sunday night (Jan. 31), used hidden camera footage from an investigation by advocacy group Global Witness that showed various attorneys talking about how to create shell companies to hide large sums for money from "a government official from a poor West African country" to buy a house, a plane and a yacht."

Sheltering the money is not illegal so long as the gains are not ill-gotten, but Global Witness created the "West African" official story with plenty of red flags.

None of the lawyers took them on as clients, or moved money, or did anything illegal, which is the problem said Global Witness CEO Gillian Caldwell in a press conference about the story and the new bill.

Citing that story, Rep. Peter King (R-N.Y.) and Carolyn Maloney (D-N.Y.), both members of the Financial Services Committee, are this week introducing legislation that "takes aim at the phenomenon of anonymously owned companies, which have in the past been used as financial vehicles for criminal enterprises and terrorism."

"This is a hugely important issue for our national security," Maloney said at the press conference. She called the 60 Minutes piece "explosive" and "scandalous," saying a terrorist or drug lord could form a shell company that could not be traced back to them. She said there were scores of people willing to protect criminals, saying she was "astonished" at the New York law firms willing to suggest ways to shelter the money.

She said the bill would be introduced this week--the third time she has tried to get it passed--that would require states to collect information on the true owners of these companies. She said virtually no states require that information now. She said the bill is narrowly tailored and will not be a big burden on states and small businesses.

Maloney said she thinks the 60 Minutes investigation will give the bill the momentum it needs to finally get a bipartisan bill passed.  She said she would turn her full attention to "making it happen."

The bill would require identifying the "beneficial owner" of the company, which would help in investigating criminal organizations and terrorism financing, she said, adding: "It is time to end this era of Anonymous Incorporated."

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