Russia probe boosts bill to crack down on shell corporations

By MARY CLARE JALONICK Markets Associated Press

Bipartisan legislation to limit the influence of so-called shell corporations in the U.S. could get a boost as Congress probes the ways that Russia influenced last year's election.

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The bill, intended to crack down on international and corporate corruption, stalled in the last Congress. But Sen. Sheldon Whitehouse, D-R.I., is renewing his push for restrictions on companies or countries that hide assets from tax authorities and law enforcement as he and other lawmakers look into Russian campaign meddling. He says one of the ways Russia is becoming increasingly entwined in U.S. affairs is through opaque U.S. incorporation laws.

For the United States to enable theft and corruption "is a potential black eye for us as a country that depends on its example to significant degree," Whitehouse said in an interview.

Senate Judiciary Committee Chairman Charles Grassley, R-Iowa, is also sponsoring the bill, increasing its chances of moving through that committee. Grassley and Whitehouse are two of four senators on the Judiciary panel who are leading an investigation into the Russian meddling.

The legislation would require states to obtain information on the true owners of corporations formed under state law and make that information available to law enforcement. It would also create penalties up to $1 million if information submitted is false, among other measures.

The original bill was introduced after the so-called Panama Papers were released last year, showing how some of the world's richest people hide assets in shell companies to avoid paying taxes. But the legislation never moved in committee. Whitehouse says he hopes the focus on Russian interference will give the bill a push this year.

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"The Russian toolbox is going to be put to work against us, and if we don't put the defenses in that we've been warned we need to put in, shame on us," Whitehouse said.