Former Democratic congressman Tom Malinowski is accusing the Trump administration of effectively dismantling an anti-money-laundering law he helped advance, calling Treasury’s decision to erase previously collected corporate ownership data “totally illegal.”
The criticism followed an announcement from the Financial Crimes Enforcement Network that US companies and persons will be permanently exempt from reporting beneficial ownership information under the Corporate Transparency Act. FinCEN also said it will delete information previously submitted by individuals it reasonably believes are US persons.
Malinowski argued that the original system had a straightforward purpose: allow law enforcement to identify the real people behind otherwise anonymous companies used in financial crimes.
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“Treasury deleting the beneficial ownership info it already gathered is utterly crazy,” he wrote on X, comparing the move to deleting an investigative database already available to authorities.
He went further, accusing Treasury of making it easier for drug traffickers, Russian and Chinese kleptocrats, and other criminals to conceal money through US entities.
Malinowski’s assertion that Treasury cannot simply abandon the law is only partly straightforward. The Corporate Transparency Act expressly allows Treasury, with written concurrence from the attorney general and homeland security secretary, to exempt classes of entities when reporting would not serve the public interest and would not be highly useful for law enforcement or national security. Treasury relied on that exemption authority when narrowing the system.
The planned destruction of existing data raises a separate question. The statute says beneficial ownership information required under the law “shall be maintained by FinCEN for not fewer than 5 years” after a reporting company terminates. The same law established strict limits on access, including use by federal agencies for national security, intelligence, and law enforcement purposes.
FinCEN says it will coordinate with the National Archives and Records Administration to comply with federal records laws while removing US-person information.
Malinowski predicted the policy will ultimately be challenged in court.
“This will find its way to court. It will be struck down,” he wrote. “But the deletion of data currently available to law enforcement may be irreversible.”
Treasury, meanwhile, says the rollback eliminates unnecessary costs for millions of businesses without compromising national security.
One Response
Require ownership and activity to be transparent. Require oversight to be independent.