For 20 years, I've worked to expose and challenge all sorts of corruption and financial crime. In that time, I've come across a host of shady characters looking to cheat the system and rip off the rest of us. Whatever their game, these crooks have one thing in common: they all own anonymous shell companies.
Whether they're tax cheats, mobsters, drug dealers or corrupt leaders stealing oil money from their people in poor countries, these anonymous company owners are routinely and easily able to hide what they are doing behind layers and layers of paper.
We generally assume that people with something to hide look to the tax havens that the British author Somerset Maugham described as "sunny places for shady people." We also assume that what they do -- money-laundering, fraud and other types of corruption -- doesn't really hurt us ordinary people.
These are reasonable assumptions, but they're wrong. Tax havens are a big part of the problem, but the U.S is a bigger one. Some states are among the easiest places on the planet for anonymous company owners to set up an untraceable shell company. In many states, you need less identification to set up a company than you do to get a library card. You don't even need to be a real person -- one company can own another company, which owns another and so on. Stacked up like Russian dolls, it's impossible to tell who's really behind it all.
As Global Witness' new report The Great Rip Off shows, this is harming the interests of ordinary Americans. We've looked at a raft of serious crimes that the authorities are desperately trying to stop and shown how they were carried out by anonymous owners of companies registered right here in the U.S.
The Washington Post delved into the report and some of these cases today.
Some are striking because they target the most vulnerable. Like the Ohio school district employee who used a web of fake companies to bill for millions of dollars' worth of services that school kids never received. Or the Texas lawyers who used sham companies to trick elderly people into investing their life savings in worthless enterprises.
Others stand out because they threaten U.S. security. The Iranian government, for example, used an anonymous company registered in New York to hide its ownership of a skyscraper on Fifth Avenue, violating economic sanctions imposed by U.S. authorities.
There are lots more. In what we found, the authorities may well catch up with anonymous owners eventually. But not before a great deal of time and money has been spent trying to peel away the layers of corporate secrecy and enforce the law or before great suffering has been inflicted on the victims. And who knows how many criminals remain at large, undetected and unpunished behind the shield an anonymous company offers them?
It doesn't need to be this way. By creating a public registry of the real, human owners and controllers of companies, our governments can bring business into the open and help end the great rip off. This is what I am calling for here in America.
To be clear, I am not attacking companies. After all, they exist for a good reason -- they limit liability if a business idea does not work out and make sure would-be entrepreneurs don't lose everything. But this sound principle is being abused, by people who have no interest in legitimate business. They just need a smokescreen behind which they are free to rip off innocent consumers and investors.
That's bad for the markets as well as individuals. Markets work well when we know who we're doing business with and have a basic level of trust in them. That confidence needs to be backed up by a guarantee that those who cheat the system will be held accountable. Anonymous companies remove that guarantee, and you don't know who you are doing business with.
Increasingly, the rest of the world agrees that this is an issue whose time has come. The British government -- which was until recently deaf to these arguments -- announced this year that it will be creating the world's first public registry of the real, human owners of U.K. registered companies. There are strong signs of change in the E.U., too. Outside of politics, the campaign has won support from business and law enforcement in the U.S.
But the U.S. is lagging behind in terms of real change, and, until we see that change, the problem is not going away. We don't need anonymous companies. They are the getaway cars for all sorts of criminals and fraudsters who are hurting U.S. interests -- it's time to take away the keys.
This blog post is part of the Masterminds series produced by The Huffington Post in partnership with NBC's The Blacklist. To see all the other posts in the series, click here.