After holding an anti-money laundering bill for a month in the hopes of winning over the committee’s top ranking Republican, the House Financial Services Committee advanced it without him on Wednesday, in a move that could ultimately undermine the odds of passing it through the Senate.
The legislation would require corporations and limited liability companies to report who actually owns them to the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, in the hopes of curbing the use of anonymous shell companies for hiding illicit assets from criminal investigators and tax officials.
The bill’s sponsor, New York Democrat Carolyn B. Maloney, pulled the bill from the committee’s May markup session after ranking Republican Patrick T. McHenry of North Carolina expressed reservations over requiring small businesses to report information to FinCEN without quantitative data from the agency demonstrating how that information would help law enforcement.
The bill’s supporters had hoped that, with McHenry on board, most of the committee’s Republicans would have voted in favor. But McHenry said he never received satisfactory answers from officials at FinCEN who, along with Treasury Secretary Steven Mnuchin, back the bill.
“We need to employ every tool in our arsenal to stop financing of terrorist and criminal activity,” McHenry said. “But, I’m very concerned that we do not have the basic data we need to understand the impact of this bill or at a minimum whether this bill is even needed.”
Only 10 of the 26 Republicans on the House Financial Services Committee voted in favor of Maloney’s bill, following the lead of co-sponsor Peter T. King of New York and Blaine Luetkemeyer of Missouri, who introduced a similar measure last year and had worked closely with Maloney on a number of tweaks to make the bill more palatable to his side of the aisle.
Still, the bill’s supporters sounded optimistic after the vote.
“We got double-digit support from the Republican side of the aisle,” said Clark Gascoigne, deputy director at the Financial Accountability and Corporate Transparency, or FACT, Coalition, which has led on the issue for years. “We feel very comfortable that we have a strong bipartisan coalition.”
Gascoigne believes they can still woo McHenry before the measure moves to the floor and have even more Republicans follow.
“McHenry is not a hard no,” he said. “He’s left himself open to supporting this as more data flows in. We know that Treasury intends to get him more data over the next few months, in fact there is some other data that will probably be coming to his office in the next few days.”