Need For Transparency
The measure’s supporters, from good-government groups such as Common Cause and unions including 1199SEIU and the New York AFL-CIO, say privacy concerns should take a back seat to the need to fight financial crimes and corruption.
“If people know they have to disclose who they are behind these entities, it might actually deter wrongful conduct,” said Maria Vullo, former superintendent of New York’s department of financial services.
Across the state, just 7% of properties are owned by LLCs, while in Manhattan, the share is 37%, according to Reinvent Albany, a watchdog group that advocates for the bill.
“It’ll make it harder to sell high-end real estate to people who want to launder their money,” said John Kaehny, Reinvent Albany’s executive director. “That’s the crux of this issue.”
Public access to a registry will help people who have traditionally needed to take legal action against LLCs to figure out who’s behind them and get problems resolved, supporters say. The database, for example, could aid tenants in dealing with unresponsive landlords, or workers fighting for back pay.
“All of us need transparency,” said Assemblymember Emily Gallagher, a sponsor of the bill who represents part of Brooklyn. The public database is more “efficient” than a system that would only give government officials access to owners’ names, she said.
Potential Fallout
One argument against the bill is it would be redundant with the U.S. Corporate Transparency Act, which takes effect next year. Under that law, companies are required to report to the Treasury Department the identities of beneficial owners with at least a 25% stake in the entity’s interests. The registry will be accessible to federal and local government officials for activities related to national security and law enforcement, as well as to financial institutions and their regulators in certain circumstances.
The state measure’s opponents also have warned of detrimental fallout from public disclosures.
“When you have a list of personal information in a publicly available database, it can be used by hackers, it can be used by foreign entities, it can be used by people to intimidate, to harass, to discriminate,” said Ashley Ranslow, New York State director of the National Federation of Independent Business. “You’re opening up businesses and small business owners to a host of really serious problems.”
This article was provided by Bloomberg News.