No Transparency in the Corporate Transparency Act

I was always skeptical of the sincerity behind the Corporate Transparency Act. Now I am simply mad.

The idea sounded both important and overdue. Companies formed in the United States would be required to identify the human beings who actually owned or controlled them. The information would not be made public, as the Act’s name might suggest, but would be held in a confidential federal database available under safeguards to law enforcement, national-security agencies, financial institutions, and certain other authorized users.

The stated purpose was to make it harder for people to hide behind anonymous shell companies while laundering money, evading taxes, financing terrorism, committing fraud, or moving the proceeds of corruption.

Who could oppose legitimate efforts to uncover those things?

Apparently, enough people with enough influence.

Years were spent debating, enacting, defending, interpreting, implementing, and litigating the law. Federal agencies wrote rules and guidance. Technology was developed. Businesses paid lawyers and accountants to determine whether they were covered. Owners gathered information, submitted reports, worried about deadlines, and tried to comply. Government employees devoted untold hours to building and administering the system.

All of that required time, energy, private expense, and taxpayer money.

Then, on August 13, 2026, this announcement arrived in my email:

“The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued a final rule that permanently removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information under the Corporate Transparency Act.”

I about fell off my unicorn.

How does that even make sense?

The Corporate Transparency Act now exempts companies created in the United States from its beneficial-ownership reporting requirements. It also exempts U.S. persons from reporting their ownership of the foreign companies that remain covered. FinCEN has gone even further, announcing that it will delete previously reported information it reasonably believes belongs to U.S. persons.

What remains is a transparency law directed primarily at certain foreign entities and foreign individuals.

SURPRISE.

Surprise, surprise.

More of the same, again and again, ad infinitum.

The government’s explanation is that the reporting requirements imposed an unnecessary burden on millions of law-abiding American small-business owners. That concern deserves to be taken seriously. Small businesses already carry an enormous regulatory burden, and government should not make ordinary people spend money complying with rules that do little public good.

But why was the answer to improve the system not to improve it?

Why not simplify the filing? Narrow the information required? Protect truly small, low-risk businesses? Integrate beneficial-ownership reporting into existing state filings? Punish misuse of the database severely? Concentrate enforcement on high-risk entities and suspicious transactions?

Why spend years constructing a system intended to identify the people behind American companies, only to exempt American companies from it?

I cannot prove that the reversal was designed to protect politicians, wealthy donors, influence brokers, or members of the elite. But I have lived long enough — and seen enough — to understand that secrecy rarely benefits the powerless. Complexity may burden ordinary people, but opacity disproportionately protects those with the money, lawyers, entities, and relationships necessary to exploit it.

Too many powerful people have too many financial relationships they would prefer not to explain. Some may be entirely lawful but politically embarrassing. Others may reveal conflicts, influence, self-dealing, or conduct that creates the appearance of wrongdoing even if no crime can be proved.

Transparency does not automatically establish guilt.

It does, however, make questions possible.

Perhaps that is the real problem.

And something else has been lost: deterrence.

Transparency is not merely an investigative tool used after wrongdoing occurs. It is also a warning before it begins. A person deciding whether to conceal assets, launder money, evade taxes, disguise a conflict, or hide behind a chain of entities may calculate the risk differently when that person knows his or her name must be attached to the enterprise in a database available to authorized investigators.

Beneficial-ownership reporting would never have eliminated corporate wrongdoing. No law does. But it would have increased the possibility of discovery — and sometimes that possibility is enough to make a would-be wrongdoer hesitate, reconsider, or abandon the plan.

By exempting U.S. companies and deleting information already reported by U.S. persons, the government has not merely dismantled a recordkeeping system. It has removed a potential obstacle from the path of future wrongdoing. Anyone considering the misuse of an American entity now has one less reason to fear that the human being behind it will be identified.

That loss cannot be measured only in deleted records or wasted dollars. It must also be measured in the misconduct that might have been deterred but now will never be prevented.

Does dismantling a law after years of public expense make the people responsible shitty humans? Do they occupy some position on the degradation scale of evil? On particularly angry days, I am tempted to answer both questions affirmatively.

Ultimately, I must leave judgment of their souls to God.

Here on Earth, however, citizens remain entitled to judge the consequences.

And the consequences extend beyond corporate filings.

What happens when Americans repeatedly watch their government announce a noble reform, spend years and millions implementing it, demand compliance from ordinary citizens, and then hollow it out once the machinery is finally in place?

What happens when laws appear strict during the press conference but become porous when they approach the people and institutions with the greatest ability to hide behind them?

People stop believing.

They stop believing that the rules apply equally. They stop believing that government operates in good faith. They stop believing that capitalism rewards work more reliably than access. They stop believing that democratic institutions are capable of correcting themselves.

Does one failed transparency initiative cause Americans to embrace socialism? Of course not. But accumulated disillusionment has consequences. When people conclude that markets are manipulated, government is captured, and the wealthy play by rules unavailable to everyone else, we should not be surprised when they begin searching for a radically different system.

That does not prove socialism is the answer.

It proves that hypocrisy creates an opening for it.

The surest defense of democratic capitalism is not another speech about freedom. It is a system visibly worthy of public confidence — a system in which enterprise is rewarded, corruption is exposed, influence can be examined, and the same standards apply whether a person owns one small company or a labyrinth of entities spread across jurisdictions.

Trust does not disappear all at once. It erodes one abandoned promise at a time.

The Corporate Transparency Act promised that the government would begin identifying the human beings hiding behind opaque legal entities. What Americans received instead was years of expense, compliance, litigation, reversal — and now deletion.

No accountability.

No meaningful domestic reporting.

And, finally, almost no transparency in the Corporate Transparency Act.