A gift to money launderers

Philip Mattera, Dirt Diggers Digest - During the past two months, the federal government has adopted various kinds of leniency for corporate and white collar lawbreakers. The Justice Department has suspended enforcement of the Foreign Corrupt Practices Act. DOJ and the SEC have abandoned numerous investigations of corporate misconduct. The Consumer Financial Protection Bureau is being dismantled. The EPA is being neutered.

Most recently, the Treasury Department announced it would not enforce the beneficial ownership reporting provisions of the Corporate Transparency Act (CTA) with regard to domestic companies. Treasury Secretary Scott Bessent called the move “a victory for common sense.”

Actually, it is a victory for money launderers. The CTA was enacted to address the problem of illicit money flows around the world. Opponents have been seeking to undo the CTA since its enactment in 2021. Their legal challenges appeared to be succeeding until the Supreme Court upheld the law earlier this year. Now the Treasury Department’s Financial Crime Enforcement Network (FinCEN) is using administrative procedures to severely restrict the scope of the law. As a result, the number of entities expected to report beneficial ownership will plunge from an estimated 32 million to about 20,000.