“The executive branch cannot repeal a law by rule-making. That fundamental principle resolves this case,” says the lawsuit, which was filed earlier this week in U.S. District Court for the District of Oregon.
A coalition of state attorneys general, along with the District of Columbia, has filed a lawsuit against the Trump administration’s decision to rollback reporting requirements for certain financial crimes.
According to Reuters, the Trump administration in August finalized a rule exempting United States-based companies and individuals from reporting beneficial ownership to the Treasury Department’s financial crimes unit. The decision rolls back reporting requirements established in 2021 under the Corporate Transparency Act.
The lawsuit asks a federal court to overturn the new rule, which is itself part of a broader effort by the Trump administration to curtail anti-corruption legislation and enforcement.
“The executive branch cannot repeal a law by rule-making. That fundamental principle resolves this case,” says the lawsuit, which was filed earlier this week in U.S. District Court for the District of Oregon.
The lawsuit claims that the Trump administration is attempting to gut the 2021 Corporate Transparency Act by exempting an estimated 99.9% of the companies and persons originally required to submit disclosures to the Treasury Department.
“The Trump Administration is unlawfully rolling back reporting requirements meant to help law enforcement track down bad actors who hide financial assets in shell companies. These anonymous accounts are often used for illegal activity—like by cartels and criminals to money launder, traffic drugs, or to hide bribes or illegal kickbacks,” said California Attorney General Rob Bonta, a named plaintiff in the complaint. “Congress passed the Corporate Transparency Act with bipartisan support because it understood law enforcement needed an important additional tool to root out illegal financial transactions and corruption. My office is committed to supporting law enforcement’s efforts to enforce the laws that keep people safe and hold bad actors accountable.”
Colorado Attorney General Phil Weiser, another plaintiff in the case, made a similar argument.
“Criminals use shell companies to hide stolen money, evade taxes, and conceal illegal activity. Congress passed this bipartisan law to give law enforcement the tools to follow the money and hold wrongdoers accountable,” Weiser said in a statement. “The Trump administration cannot simply disregard federal law and eliminate safeguards that protect Coloradans from financial crime.”
Reuters notes that U.S. Sen. Elizabeth Warren, the top-ranking Democrat on the Senate Banking, Housing, and Urban Affairs Committee, said in August that the decision to roll back reporting requirements would likely increase the risk of sanctions evasion, fraud, drug trafficking, human trafficking, and organized crime.
Sources
Attorney General Bonta Sues Trump Administration for Rolling Back Financial Crime Enforcement
Trump administration sued over rollback of corporate ownership reporting rules
Join the conversation!