Who’s really behind Chamber’s support for corporate anonymity?

If I were to tell you that there’s an issue out there that enjoys broad, bipartisan support, even in this polarized election year, most readers would probably laugh.

And yet, anti-corruption nongovernmental organizations (NGOs), good government groups, the FBI and other law enforcement agencies, small business associations, big banks, congresspersons, senators, even the fractious European Union all agree: The time has come to end corporate anonymity.

There is one prominent group, however, that is opposed to ending corporate anonymity: the U.S. Chamber of Commerce.

{mosads}Corporate anonymity is currently the rule in most U.S. states and many foreign countries. These jurisdictions do not collect ownership information about companies incorporated under their laws.

This corporate anonymity creates a host of problems large and small.

Most troubling is the fact that terrorists, arms dealers, drug traffickers and other criminals use anonymous companies to finance their activities and conceal and launder their profits.

For example, one arms dealer known as the “Merchant of Death” used 12 different anonymous companies in Delaware, Florida and Texas to finance the sale of arms to Colombian rebels.

Also highly problematic is the fact that anonymous companies can be used to defeat the disclosure requirements in campaign finance laws. During the 2012 election, one anonymous company was formed, donated $1 million to a super-PAC backing 2008 GOP nomine Mitt Romney, and then dissolved itself. The super-PAC was only required to list the company — and not those behind it — as a donor, completely robbing voters of any meaningful transparency.

Other problems with anonymous companies include the fact that they are used by individuals to facilitate tax evasion and money laundering by corrupt government officials to hide their ill-gotten gains, by businesspeople to defeat procurement rules designed to help small businesses and minority-owned businesses, and by landlords to evade complying with building codes.

Anonymous companies are even used to hide the ownership of real property — the house next door may be hosting a succession of loud, violent parties that members of law enforcement can have trouble shutting down because they can’t determine who actually owns the house, as one northern Virginia neighborhood recently found out, much to its chagrin.

Despite the overwhelming evidence of the myriad harms caused by anonymous companies and the broad-based support for ending corporate anonymity, the U.S. Chamber of Commerce remains staunchly opposed to efforts to end corporate anonymity.

The Chamber rather absurdly claims that the proposed legislation requiring companies to disclose their beneficial or true owners would somehow impede capital formation and impose onerous filing requirements on almost all businesses.

First of all, many businesses, including publicly traded companies required to file reports with the Securities and Exchange Commssion (SEC) and companies with more than 20 full-time employees in the U.S. and more than $5 million in gross sales, are exempt under the proposed legislation.

The reason for these exemptions stems from the fact that legitimate businesses — those engaged in actual economic activity with sales and offices and employees — are not the problem.

Instead, it is almost exclusively shell companies — those with no employees, no sales, no offices — that exploit corporate anonymity in order to engage in illicit activity.

Secondly, for those companies not exempt, the filing requirement could not be less onerous. Beneficial owners would simply be required to supply their name, address and passport or driver’s license number.

Hardly the sort of onerous regulatory burden that would impede capital formation as the Chamber claims.

Legitimate businesses — big and small — have no interest in opposing the proposed legislation. Big businesses, the vast majority of which are owned by a multitude of shareholders, would be exempt from reporting requirements.

And for small businesses, not only is the reporting requirement quick and painless, but it also protects them against unfair competition in government contracting, unscrupulous landlords and other fraudsters who hide behind anonymous shell companies.

So if the Chamber’s support of corporate anonymity is unrelated to the defense of big or small businesses, then what’s driving it?

Could it be that the Chamber’s defense of corporate anonymity is driven not by the interests of the vast majority of businesses, but instead by the interests of the legions of corporate formation agents and accountants who profit from the current system and whose services would be less in demand if the system became more transparent?

Could it be that the Chamber’s defense of corporate anonymity is also driven by the interests of the managerial class — corporate executives and other elites who are the most likely to use anonymous shell companies to hide their ownership of assets, as was revealed by the Panama Papers investigation?

When the nation’s largest business association takes a position that has nothing to do with the interests of business, one is left to wonder, who’s actually setting its agenda?

Chamber member companies should be asking themselves this very question.

Dudis is the director of Public Citizen’s U.S. Chamber Watch Program.

The views expressed by contributors are their own and not the views of The Hill.