Manafort indictment includes Delaware LLCs
Former campaign chairman Paul Manafort pled not guilty to money laundering, tax fraud and foreign lobbying related to work in Ukraine.
The indictment states that of the 23 LLCs Manafort used in the alleged scheme, nine were in Delaware.
State Rep. John Kowalko, D-Delaware, said this illustrates Delaware’s complicity in enabling corruption through lax LLC licensing laws.
“I’m sure there are other entities out there that are questionable that we renew them year after year without a screening process,” he said.
Kowalko’s bill aims to create a process to weed out individuals and entities that use an LLC status to hide activities like money laundering, arms dealing, drug trafficking and human trafficking.
The law would put restrictions on individuals and entities identified by federal agencies as a threat to the country.
“This will enable us to guard against future intrusions, whether it be in the case of Backpage human trafficking, or El Chapo, who had a Delaware LLC with drug money, or other instances where it has been ascertained there are money launderers, drug money smugglers, arming of terrorist organizations that are filtering their money through Delaware LLCs, and it should not be difficult to identify these overtly threatening applicants,” Kowalko said.
“I think this bill is a first step to reigning in our enthusiasm to just sign everybody up for a $300 licensing fee.”
To obtain obedience to federal laws protecting national security, with the help of registered agents, this Bill will prevent the use of our Limited Liability Act by persons and nations identified by federal agencies as a threat to this country. The bill also seeks to prevent existing limited liability company owners who are on the lists of prohibited persons or governments, but may have formed a Delaware LLC already, from getting involved in industries in which the federal government has placed restrictions on certain investments. Requiring clearance from the Committee on Foreign Investments in the U.S. for their plans will enable the Secretary to waive this provision when it is received.
Registered agents must be the parties to screen for identified threats because those with a contract with the Department of State enter applications on its computers on a regular basis. CFIUS seldom prevents investments, (two since 1989 to be precise) but it may ask for mitigation in some way to reduce the potential threat involved.
This Act will not impact the ability of almost any applicant to easily form an LLC nor does it require any companies to disclose more information to the Secretary of State in its application for certification than is now required.