The past month has seen an unprecedented deluge of bad news on the anti-corruption front in the United States. President Donald Trump announced the U.S. would no longer enforce the Foreign Corrupt Practices Act, or FCPA, which prohibited Americans from bribing foreign officials. Trump’s new attorney general, Pam Bondi, dissolved all of the kleptocracy-related task forces at the Department of Justice. As if none of this was sufficient to herald that the heyday for grifters had returned, Trump started hawking $5 million “gold card” visas, selling American citizenship to any and all oligarchs who wanted it—even those in places like Russia.
It’s been catastrophic for both U.S. policy and erstwhile U.S. anti-corruption leadership. But on Sunday night, it got even worse: In a press release from the Treasury Department, and a related screed from Trump on Truth Social, the new administration announced it was doing away with the most important piece of America’s counter-kleptocracy tool kit. According to the Treasury Department, the U.S. will no longer be enforcing its Beneficial Ownership Registry, a new database that identifies those behind the flood of shell companies saturating the U.S. As Treasury Secretary Scott Bessent said, the move to implode the new shell company registry was a “victory for common sense.” Trump followed on, claiming that the shell company register was not only an “absolute disaster” but an “economic menace” that had to be gutted.
Trump is, in his way, right about one thing: The shell company registry was supposed to be a menace. But not to small-business owners, or even to the great swath of Americans about to watch their country once more become the leading shell company purveyor. It was an existential threat to the money launderers, oligarchs, and kleptocrats who spent years using shell companies to hide their ill-gotten boodle, keeping it safe from prying eyes and injecting it directly into the American economy: in other words, exactly the sort of folks who need menacing. Unfortunately, in this new order, these scofflaws are the very people who stand to be enriched by Donald Trump—while the American people, by contrast, are stuck bearing the high costs of his wealth-destroying tariff war.
The U.S. is hardly the only country that provided these kinds of companies, which exist only on paper and all too often exist only to hide the identities of their true owners. But it was the U.S. that perfected the art of the anonymous shell. States like Delaware offered shell companies to anyone, anywhere, in as little as 15 minutes, for as little as $100. Wyoming (which first invented the LLC—one of the most popular forms of shell company—back in 1977) and Nevada followed suit.
With that, a kleptocracy consultancy arms race was on, all of these states competing with one another to see who could provide the most secrecy and legal protection to sundry bad actors—cartel heads and human traffickers and fentanyl dealers and the like. Thanks to the lack of federal oversight, American states could create whatever kind of shell company their klepto-clients could want, no questions asked. All of it culminated in transforming the U.S. into the global leader in shell company provisions, allowing the U.S. to leapfrog traditional offshore finance havens like the British Virgin Islands or Panama.
Naturally, shell companies don’t exist as ends in and of themselves. In stripping away identifying information, they allowed those looking to launder their dirty money to then plow that illicit wealth into real estate, the art market, private equity, hedge funds, or anything else that could freely—and legally—accept this kind of anonymous wealth. Entire industries ballooned on the backs of this untraceable money, with more and more looted wealth, drained from countries overseen by kleptocratic regimes, pooling across the U.S. All too often, when investigators managed to get a lead that a luxury condo or priceless Picasso or skyscraper-size yacht was owned by, say, a sanctioned oligarch, they would only be able to track the ultimate ownership to a shell company in Wilmington or Reno, and no further. The trail for tracking an untold sum of dirty money and the networks behind all that filthy lucre fell cold, thanks to anonymous American shell companies.
That was all supposed to change, however. In 2021, a bipartisan group of legislators passed the Corporate Transparency Act, pledging to enact America’s first shell company registry—and follow in the paths of places like the U.K., which had implemented its own variant years before. It’s no exaggeration to say that the legislation was the single-greatest anti-corruption step the U.S. had taken in decades, and set the tone for many of the other improvements we’ve seen in the years since. American officials took pains to ensure the new registry wouldn’t be abused or misused, slow-walking regulations to gather as much input as possible—and even ensuring that, unlike the U.K.’s version, the American registry would be private, accessible only to government officials.
The effort was expected to bear fruit this year, with the deadline for reporting the true, beneficial owners of all American companies finally coming due. The Trump administration even gave early indications that it would offer a sort of grudging respect to the new registry, seeing it as a tool to target ill-gotten wealth linked to Iran, cartels, and the like. With a single statement, the White House reneged, demonstrating that it didn’t care one whit for all that progress, all that transparency, and all that momentum toward finally ending America’s role as a center of global kleptocracy.
Taken in a vacuum, the announcement that the new shell company registry is stillborn is shocking. After all, we’ve seen years of bipartisan support for this registry for nearly 20 years. The registry would be an incredibly effective tool to help identify Iranian sanctions-dodgers, Venezuelan officials with one hand in their constituents’ pockets, or cartel chiefs on the make—bad actors whom Republicans supposedly care about bringing to heel. Instead, Trump has signaled to a small universe of villains that the United States is back in the business of aiding and abetting, with a range of choices—such as American real estate or invaluable art collections—available for them to conveniently stash their cash.
Trump has already torn out so many of the other pages of the U.S. anti-corruption playbook, so the move to shatter the shell company registry is hardly surprising. After all, this is a president who owes much of his wealth to precisely the kinds of anonymous shell company networks bleeding other nations dry and squirreling that money away in American luxury real estate. It’s also of a piece with Trump’s other moves, such as a “meme coin” acting as a beacon for anyone looking to fund a sitting president directly, or his administration’s orders to drop charges against any politician alleged to take foreign funding—so long as those politicians do Trump’s bidding.
It’s nothing but kleptocracy, all the way down. Thanks to Trump’s moves, we’ll be lucky to ever know who took advantage—or how much this has all benefited a president who is demolishing any and all of America’s anti-corruption credentials. If, as writer Adam Serwer coined, “cruelty was the point” of Trump’s first administration, it’s clear that, this time around, corruption is the point.
