Ever since Donald Trump returned to the White House, his administration has taken a sledgehammer to anti-corruption efforts, destroying policy after policy dedicated to preventing bribery and money laundering in the country. But this week brought the biggest blow yet: The Treasury has obliterated a recent rule to deter devious shell companies, handily reopening the American economy to anyone looking to hide their illicit wealth.
On Tuesday, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced that businesses formed in the United States would no longer need to disclose their actual owners, and that nearly all the data already gathered on such companies would be destroyed. This move, which Treasury Secretary Scott Bessent called “a victory for common sense and American small businesses,” effectively undoes years of progress in curbing devious financial networks, both domestic and foreign. It also delivers a new shelter for wealthy Americans who wish to dodge taxes and move money around undetected. Corporate entities that allow owners to stay anonymous are handy vehicles for corruption—they enable dodgy characters from around the world to stash their proceeds in an otherwise legal American business. After a brief experiment cracking down on these black boxes, the U.S. has decided to let them multiply instead.
Technically, this company registry will still exist, but as a mockery of its former self. When the registry was created a few years ago, it was heralded by many (including me) as the single greatest anti-corruption step the United States had taken in decades. The U.S. had long been the primary provider of anonymous shell companies to anyone and everyone around the world. For as little as $100 and in as little as 15 minutes, any cartel head, human trafficker, oligarch, autocrat, kleptocrat, fentanyl dealer, or corrupt politician in America or overseas could create a shell company in states such as Delaware, Nevada, and Wyoming. Perfectly untraceable and perfectly legal, American shell companies became by the late 2010s the go-to tools for anyone looking to hide their financial tracks for any reason.
[Read: America has never seen corruption like this]
These companies weren’t just the preserve of foreign crooks. The industry in the U.S. has long served wealthy Americans looking to hide their assets and enrich themselves and their families. American shells provided all of the secrecy protections they could want and, after the Supreme Court’s 2010 Citizens United decision eliminated corporate-spending limits in American politics, they became an ideal tool for covertly bankrolling American politicians, saturating U.S. elections in billions of dark, untraceable dollars.
Efforts to end the scourge of American shells finally broke through just as Trump’s first term was coming to a close. The bipartisan Corporate Transparency Act—which passed in early 2021, over Trump’s veto—would finally force these companies to divulge their owners. The legislation wasn’t perfect; unlike the company registries in the United Kingdom and elsewhere, the proposed U.S. shell-company database was to remain private, accessible only to federal officials and investigators. The rule also failed to tackle all of the ways trusts and other vehicles provide impenetrable secrecy for the wealthy and the crooked alike. But the CTA, which took effect in 2024, was deceptively simple: Corporate owners simply had to disclose who was in control. America’s reign of corporate anonymity was finally coming to an end.
Now that’s all gone. The Trump administration has gutted the legislation and is torching nearly all of the gathered data. This cannot all be blamed on Trump or Bessent. Republican allies in Congress are busy trying to pass legislation that will formally repeal the CTA, thus preventing any future administration from restarting the database.
[Read: The watchdogs are barking themselves hoarse]
The American economy is now open for business again for all kinds of mischief. “The United States Treasury has taken a step that enables criminals to continue financing and profiting from their crimes by using anonymous companies formed in the United States as their ‘getaway vehicles,’” Scott Greytak, the deputy executive director of the advocacy group Transparency International U.S., said in a statement. Anyone with dirty money can once more turn to the U.S. to launder it clean. Now anyone, domestic or foreign, can secretly barrel as much money into American elections as they want.
We have no idea how many businesses formed in the United States are sieves for foreign financing—for elections and otherwise. As Michael Sozan of the Center for American Progress wrote in 2019, these corporations allow foreign entities to “exert influence on the nation’s domestic political process.” The anonymity at play ensures that the scope of this threat will stay unknown too.
All of this is in keeping with what has become the most corrupt administration in American history. Not only has Trump and his family watched their net worths balloon by the billion since he returned to office last year, but his administration has also worked relentlessly to topple America’s anti-corruption infrastructure, eliminating task forces dedicated to combatting dirty money, killing the enforcement of anti-bribery statutes, and gutting efforts to force the wealthiest Americans to pay their fair share of taxes, among countless other measures. The demolition of the Corporate Transparency Act is just the latest and most dramatic move to cater to the president’s deep-pocketed buddies and fellow cronies. But it surely won’t be the last.
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