Shell game

Anonymous Shell Companies Harm Small Businesses
By Scott Garren, American Forum 

As a citizen, grandfather and small business owner, I am proud to call Vermont my home. Vermont has long blazed a path for the rest of the country to follow. The first state to abolish slavery, the first to commit to universal public education the first to give same-sex couples the rights of married couples, Vermont's first-in-the-nation status is so much a part of who we are. 

Yet, once again, the Green Mountain State, and our senior Senator Patrick Leahy, has the opportunity to take the lead on an important issue facing the state and the nation.

That issue is anonymous shell companies. They are as sneaky as they sound, and far more dangerous, and they should be a source of great concern to small business because they strike at the very heart of the communities we serve.

Small business owners here in Vermont proudly put their names on their products, their business cards and in their articles of incorporation, and they do so because they stand firmly behind their work. But criminals looking to launder dirty money prefer to leave their names off the stationery, and for obvious reasons. What is surprising-if not shocking-is that many states in the U.S., including our own, make it easy for criminals to hide from the law.

Want to set up a bogus cancer clinic to defraud Medicare? No problem!

Law enforcement will have a hard time catching up with you when you're hiding behind an anonymous shell company. Are you a gun runner with a cool million on your hands and Homeland Security on your tail? Not to worry! Just set up a "consulting company" or two to clean up your cash-and be sure not to put your name on the articles of incorporation.

Anonymous shell companies have been used to facilitate the illegal arms trade, to traffic narcotics, to evade sanctions, and to finance acts of terrorism. Fortunately, the US Senate recently introduced a bill that could fix these problems once and for all. The Incorporation Transparency and Law Enforcement Assistance Act currently sits before the Senate Judiciary Committee, and-as committee chair-Senator Leahy could easily put the bill on the path to becoming law by scheduling it for a hearing and a vote. 

This is a historic opportunity to put an end to the rampant abuse of anonymous shell companies and to help small business owners and the communities they serve here in Vermont and across the country in the process.

As the old saying goes, history repeats itself. Since 1777 when we wrote our constitution, Vermont has been compelled to lead-pulling the rest of the country along with it. We are once again being called upon to show the way to the rest of America. 

We have an opportunity to act, and I call upon Senator Leahy to embrace a proud Vermont tradition of independent leadership by obliging corporate owners to stand up and be counted, just as regular Vermont small business owners are proud to do.

Garren has lived in Vermont for more than a decade and his small business, Garren Shay Associates, is a consulting firm that works with schools and libraries on their technology infrastructure and planning.