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Floor Speech
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Mr. LANKFORD. Madam President, several years ago, it was a December like this; there were big bills that were coming through the House and the Senate, one of them being the National Defense Authorization Act, which has passed every single year for the last six decades.
Stuck in that multi, multi, multipage bill was a little piece on beneficial ownership. Now, most everyone just didn't even notice what it would be. But in the past couple of years, the Biden administration has released the rules for beneficial ownership and what will be required to be able to deal with ``opportunities for fraud.''
What it has become is a way to be able to get from every single small business in America--I do need to emphasize these were all small business; in fact, smallest of the small businesses--every LLC, every businessowner in America a list of them of this: their name, their date of birth, their address, an I.D. number--that is simple--but then, also, a listing of all the senior officers of the company, someone who has authority over the appointment or removal of a senior officer, and this little jewel--someone who substantially influences important decisions in your company.
Every business owner in America is required by January 1--in just a couple of weeks--to turn in that document for every single business that they own.
Now, for many folks in real estate or in construction or in many other businesses, they actually start a company and raise it up for that company. And so they may not own one company or have one LLC; they may have 20 or 30. And they have to go through the paperwork for every single one of those and be able to turn in, including answering the question: Who influences your important decisions on your company? No one even knows what that means.
Well, you may say: Well, it is no big deal if they don't turn it in.
Oh, no, it is, because under the rule that has been put out, if they don't turn this form in, it is a $10,000 fine for each company that they don't turn in or 2 years in jail if they don't submit it.
Let that soak in. Every small business owner in America has to turn in who influences their decisions, or they could go to jail for 2 years.
Now, listen. All of us around this room would say: That is too much. Why is the Federal Government asking that of every pet owner, of every hair shop, of every builder, of every subcontractor? Why are we asking them who substantially influences them? And what authority do we have to have them do that?
Well, it is a good question, actually, because a Federal judge, just a couple of weeks ago, stepped in and did a preliminary injunction, just temporarily stepped in--this, by the way, was a Federal judge who was appointed by President Obama. They stepped in and put a halt on this rule. And they said this rule is--their term--``quasi-Orwellian'' and ``likely unconstitutional.''
Now, this was an Obama judge stepping into this. They put a pause on it. But the problem is, the pause is completely dependent on the judge at this point. They can unpause it at any moment.
So the simple thing that I have asked for throughout this entire year is, let's get rid of this rule. This rule should not be there at all. Congress has no right to go to every business owner and hand them a stack of forms and say to fill these out and tell us who helps you make decisions in your company.
What in the world? So we have no right to be able to do that. So I have asked all year long: We need to get rid of it entirely. I have not been successful getting that. So we have asked a simple thing: Let's take it out for 1 year. Let's just delay it. Let's get more time to be able to talk about this. This is a big issue that Congress is laying down.
Now, I have to tell you, I have not been successful getting that either. But do you know who has been? The House of Representatives. The House of Representatives passed a 1-year delay on this rule--wait for it--420 to 1; 420 to 1.
Yeah, the House said: This is a massive overreach; let's pause this for a year, at least, until we figure out what this actually means.
What does this mean for small business owners across the country? They could--in the very earliest time of next year under a new administration, any single small business in the country could face a $10,000 fine or 2 years in prison if they haven't turned this in.
But they have all turned it in already, right? It was due January 1. Actually, FinCEN has given us the latest numbers of who has turned it in.
Let me just give a few States as an example and the percentage. In New York State: 80 percent of the small businesses haven't turned this form in yet--80 percent.
In my State in Oklahoma, 77 percent of the small businesses have not turned this form in.
In Rhode Island, 72 percent of the small businesses have not turned this form in.
In West Virginia, 80 percent of the businesses have not turned this form in.
In Wisconsin, 74 percent of the businesses have not turned this form in.
That means they could all face--all those businesses could all face a $10,000 fine or 2 years in jail because they haven't submitted a form most of them don't even know exists.
Listen: Delaying for a year is not a radical proposal. And 420 to 1 in the House is a pretty good vote, especially considering the votes of the House in the past week.
That is broad bipartisan agreement. All I am asking is: Let's pause this for a year. Let's agree with the House and not have 75 to 80 percent of American small businesses suddenly be under the heavy hand of a potential fine or jail time because they don't even know this exists. But it does. It is Federal law.
So that is my simple request that I am bringing on this very last moment to be able to deal with this.
5119 and the Senate proceed to its immediate consideration; I further ask that the bill be considered read a third time, be passed; and that the motion to reconsider be considered made and laid upon the table.
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Mr. LANKFORD. Madam President, my friend from Rhode Island and I, we have a lot of great conversations. I think we both agree on the problem here. There is clearly a problem that money could be laundered and hidden in American companies and shell companies. There is no question. I think what we disagree on is the answer to that problem.
In this setting, with this set of forms, the assumption is that those who are doing international money laundering would put down their accurate information and would identify themselves as international terrorists and money launderers. In this particular setting, every small business owner who owns a restaurant or a pet store or a bookstore or is a plumber or owns a roofing company--30 million, in fact, small businesses in America--they all have to prove their innocence.
The assumption is that a Russian oligarch who is trying to hide money will tell the truth when he fills his form out, and I find that hard to believe. But in the meantime, 30 million small businesses have to go through a form, and within weeks, probably 23 million of those will be in violation of the law, and they will face penalties of $10,000 or 2 years in jail. And most of those small business owners who run that restaurant down the street don't even know this rule exists.
It is the kind of stuff that drives Americans crazy, that they woke up one day and found out they may go to jail tomorrow because they didn't fill out a form that someone wanted.
That is what we are trying to pause. The problem is real. I just don't think this is the right solution for it in the way it is being implemented. Let's see if we can solve the problem without actually causing, literally, tens of millions of small business owners to be under the sword of Damocles that they could be rounded up and go to jail at any moment because they didn't get a form filled out.
That is what we are trying to solve in the days ahead, and I wish we could at least put a pause on this and think it through more before those small business owners find out.
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