[Congressional Record Volume 170, Number 190 (Friday, December 20, 2024)]
[Senate]
[Pages S7281-S7283]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                  Unanimous Consent Request--H.R. 5119

  Mr. LANKFORD. Madam President, several years ago, it was a December 
like this; there were big bills that were coming through the House and 
the Senate, one of them being the National Defense Authorization Act, 
which has passed every single year for the last six decades.
  Stuck in that multi, multi, multipage bill was a little piece on 
beneficial ownership. Now, most everyone just didn't even notice what 
it would be. But in the past couple of years, the Biden administration 
has released the rules for beneficial ownership and what will be 
required to be able to deal with ``opportunities for fraud.''
  What it has become is a way to be able to get from every single small 
business in America--I do need to emphasize these were all small 
business; in fact, smallest of the small businesses--every LLC, every 
businessowner in America a list of them of this: their name, their date 
of birth, their address, an I.D. number--that is simple--but then, 
also, a listing of all the senior officers of the company, someone who 
has authority over the appointment or removal of a senior officer, and 
this little jewel--someone who substantially influences important 
decisions in your company.
  Every business owner in America is required by January 1--in just a 
couple of weeks--to turn in that document for every single business 
that they own.
  Now, for many folks in real estate or in construction or in many 
other businesses, they actually start a company and raise it up for 
that company. And so they may not own one company or have one LLC; they 
may have 20 or 30. And they have to go through the paperwork for every 
single one of those and be able to turn in, including answering the 
question: Who influences your important decisions on your company? No 
one even knows what that means.
  Well, you may say: Well, it is no big deal if they don't turn it in.
  Oh, no, it is, because under the rule that has been put out, if they 
don't turn this form in, it is a $10,000 fine for each company that 
they don't turn in or 2 years in jail if they don't submit it.
  Let that soak in. Every small business owner in America has to turn 
in who influences their decisions, or they could go to jail for 2 
years.
  Now, listen. All of us around this room would say: That is too much. 
Why is the Federal Government asking that of every pet owner, of every 
hair shop, of every builder, of every subcontractor? Why are we asking 
them who substantially influences them? And what authority do we have 
to have them do that?
  Well, it is a good question, actually, because a Federal judge, just 
a couple of weeks ago, stepped in and did a preliminary injunction, 
just temporarily stepped in--this, by the way, was a Federal judge who 
was appointed by President Obama. They stepped in and put a halt on 
this rule. And they said this rule is--their term--``quasi-Orwellian'' 
and ``likely unconstitutional.''
  Now, this was an Obama judge stepping into this. They put a pause on 
it. But the problem is, the pause is completely dependent on the judge 
at this point. They can unpause it at any moment.
  So the simple thing that I have asked for throughout this entire year 
is, let's get rid of this rule. This rule should not be there at all. 
Congress has no right to go to every business owner and hand them a 
stack of forms and say to fill these out and tell us who helps you make 
decisions in your company.
  What in the world? So we have no right to be able to do that. So I 
have asked all year long: We need to get rid of it entirely. I have not 
been successful getting that. So we have asked a simple thing: Let's 
take it out for 1 year. Let's just delay it. Let's get more time to be 
able to talk about this. This is a big issue that Congress is laying 
down.
  Now, I have to tell you, I have not been successful getting that 
either. But do you know who has been? The House of Representatives. The 
House of Representatives passed a 1-year delay on this rule--wait for 
it--420 to 1; 420 to 1.
  Yeah, the House said: This is a massive overreach; let's pause this 
for a year, at least, until we figure out what this actually means.
  What does this mean for small business owners across the country? 
They could--in the very earliest time of next year under a new 
administration, any single small business in the country could face a 
$10,000 fine or 2 years in prison if they haven't turned this in.
  But they have all turned it in already, right? It was due January 1. 
Actually, FinCEN has given us the latest numbers of who has turned it 
in.
  Let me just give a few States as an example and the percentage. In 
New York State: 80 percent of the small businesses haven't turned this 
form in yet--80 percent.
  In my State in Oklahoma, 77 percent of the small businesses have not 
turned this form in.

[[Page S7282]]

  In Rhode Island, 72 percent of the small businesses have not turned 
this form in.
  In West Virginia, 80 percent of the businesses have not turned this 
form in.
  In Wisconsin, 74 percent of the businesses have not turned this form 
in.
  That means they could all face--all those businesses could all face a 
$10,000 fine or 2 years in jail because they haven't submitted a form 
most of them don't even know exists.
  Listen: Delaying for a year is not a radical proposal. And 420 to 1 
in the House is a pretty good vote, especially considering the votes of 
the House in the past week.
  That is broad bipartisan agreement. All I am asking is: Let's pause 
this for a year. Let's agree with the House and not have 75 to 80 
percent of American small businesses suddenly be under the heavy hand 
of a potential fine or jail time because they don't even know this 
exists. But it does. It is Federal law.
  So that is my simple request that I am bringing on this very last 
moment to be able to deal with this.
  Madam President, as if in legislative session and notwithstanding 
rule XXII, I ask unanimous consent that the Committee on Banking, 
Housing, and Urban Affairs be discharged from further consideration of 
H.R. 5119 and the Senate proceed to its immediate consideration; I 
further ask that the bill be considered read a third time, be passed; 
and that the motion to reconsider be considered made and laid upon the 
table.
  The PRESIDING OFFICER. Is there objection?
  The junior Senator from Rhode Island.
  Mr. WHITEHOUSE. Madam President, reserving the right to object, let 
me start by pointing out that this is a national security bill. And the 
reason that it is a national security bill is because--to paraphrase a 
famous author--the United States is engaged in a clash of 
civilizations. And I describe that clash of civilizations as between 
rule of law countries like the United States and countries that are run 
by kleptocrats and oligarchs and criminals or subject to control by 
traffickers and international criminal organizations.

  Now, if you are an oligarch or a kleptocrat or international 
criminal, the thing you want more than anything else is to be able to 
hide what you stole. And you don't want to hide what you stole in your 
own corrupt and crooked country. You want to hide what you stole behind 
rule of law.
  And the result is that the United States and other countries on the 
rule of law side of this clash of civilizations are giving aid and 
comfort to our enemies by helping them hide their crooked assets.
  The concern for the United States was made pretty clear by Treasury 
Secretary Yellen, who admitted ``there's a good argument that . . . the 
best place to hide and launder ill-gotten gains is actually the United 
States.''
  So we are trying to clean that mess up. And it is not just this 
administration. Under President Trump, Secretary Mnuchin said:

       Treasury's ability to combat tax evasion and to detect, 
     deter, and disrupt money laundering and terrorist financing 
     would be greatly enhanced through reporting of beneficial 
     ownership information.

  The suggestion that this magically appeared in some bill? No. It was 
worked through two committees in the Senate. It has been bipartisan 
from its earliest days, both in the Judiciary Committee and in the 
Banking Committee. It has been through enormous effort. And, in fact, 
the last Trump administration, working with us on this bill in 2019, 
released a statement of administration policy condemning this 
bipartisan ``measure that will help prevent malign actors from 
leveraging anonymity to exploit these entities for criminal gain.''
  Are there examples of what has been going on? Well, terrorist groups 
like Hezbollah, Putin's oligarch cronies, North Korean foreign 
operatives, and fentanyl traffickers all need shell companies to hide 
what they have stolen.
  Viktor Bout, the Russian arms dealer known as the ``Merchant of 
Death,'' used a global network of anonymous shell companies, including 
at least 12 incorporated in Delaware, Florida, and Texas. Anonymous 
LLCs impeded New York City's ability to trace the terror finance scheme 
that funded the 9/11 attacks--again, shell corporations that we didn't 
know who was really behind.
  An anonymous New York company served as a front for the Iranian 
government in violation of U.S. sanctions, with millions of dollars in 
rent illegally funneled to Iran.
  A DOJ indictment last year said that cartel operatives designed a 
network of shell companies in Wyoming to launder illegal millions for 
the Sinaloa cartel. Narco traffickers in New Jersey were charged with 
using an American shell company to buy fentanyl-related supplies from 
China.
  So this is a real problem, which is why the Trump administration's 
Statement of Administration Policy was supportive.
  Now, we went through a lot of effort to get here. The first group 
that stood up against it was the U.S. Chamber of Commerce, and when it 
was exposed what they were arguing for, they actually ended up backing 
off and going to neutral on the bill, because they are bank members and 
they are anti-money laundering members.
  And other Members of the Chamber said: What are we doing here?
  And as soon as when that entity disappeared, up came the American Bar 
Association, doing the same thing. And their banking session and their 
anti-money laundering session and their former prosecutors and their 
national security folks all said: What are you doing?
  And so the American Bar Association backed off.
  The third in this game of political special interests whack-a-mole 
was NFIB, which came in to present the same stale argument to Senator 
Graham, Senator Grassley, and myself that were so stale and so flagrant 
that--well, I am not going to name names. Let's just say the NFIB had a 
very bad day facing down this bipartisan group.
  So a lot of work has gone into this. The stakes are very high. This 
actually is a national security bill. And against that risk of being 
the loser in the clash of civilizations, because we are giving aid and 
comfort to our enemies by allowing them to use American shell 
corporations to hide what they get selling fentanyl to our citizens, 
here is what we ask: When you set up a corporation, you tell us your 
name. That is not very complicated. You can do that pretty quickly. You 
tell us your address. That doesn't take more than a couple of seconds 
to remember. What is my address? Yeah, write that down. Your date of 
birth? That is pretty simple too. And then either a passport or 
driver's license number. It is, literally, that simple. Where it gets 
complicated is where you have complex networks of joined shell 
companies in a complex corporate structure. But if that is what you 
have got, the very same lawyers who put that complex structure together 
can easily add this information.

  So, in my view, delaying the Corporate Transparency Act would empower 
criminals who are operating through American shell companies, who 
outcompete and defraud honest small business owners, while emboldening 
and facilitating terrorist groups, foreign adversaries like Russia and 
China and Iran, North Korean weapons of mass destruction financing, 
fentanyl trafficking, and a whole array of grotesquely bad actors.
  So I object. With great regard for my friend Senator Lankford, I 
object.
  The PRESIDING OFFICER. Objection is heard.
  The senior Senator from Oklahoma.
  Mr. LANKFORD. Madam President, my friend from Rhode Island and I, we 
have a lot of great conversations. I think we both agree on the problem 
here. There is clearly a problem that money could be laundered and 
hidden in American companies and shell companies. There is no question. 
I think what we disagree on is the answer to that problem.
  In this setting, with this set of forms, the assumption is that those 
who are doing international money laundering would put down their 
accurate information and would identify themselves as international 
terrorists and money launderers. In this particular setting, every 
small business owner who owns a restaurant or a pet store or a 
bookstore or is a plumber or owns a roofing company--30 million, in 
fact, small businesses in America--they all have to prove their 
innocence.

[[Page S7283]]

  The assumption is that a Russian oligarch who is trying to hide money 
will tell the truth when he fills his form out, and I find that hard to 
believe. But in the meantime, 30 million small businesses have to go 
through a form, and within weeks, probably 23 million of those will be 
in violation of the law, and they will face penalties of $10,000 or 2 
years in jail. And most of those small business owners who run that 
restaurant down the street don't even know this rule exists.
  It is the kind of stuff that drives Americans crazy, that they woke 
up one day and found out they may go to jail tomorrow because they 
didn't fill out a form that someone wanted.
  That is what we are trying to pause. The problem is real. I just 
don't think this is the right solution for it in the way it is being 
implemented. Let's see if we can solve the problem without actually 
causing, literally, tens of millions of small business owners to be 
under the sword of Damocles that they could be rounded up and go to 
jail at any moment because they didn't get a form filled out.
  That is what we are trying to solve in the days ahead, and I wish we 
could at least put a pause on this and think it through more before 
those small business owners find out.
  With that, I yield the floor.
  The PRESIDING OFFICER. The junior Senator from Oklahoma.