Federal Indictments Expose Corruption in Delaware LLC Licensing

October 30, 2017

We’re number one!

The release of indictments today regarding the ongoing Mueller investigation reveals the startling reality of Delaware’s complicity in enabling corruption due to lax LLC licensing rules and laws.

You can read the full indictment here.

Per the filed indictment: Manafort and Gates owned or controlled 23 “Domestic Entities” used in the scheme, and, of those 23 domestic entities, 9 were Delaware LLCs.

Congratulations, Delaware, we are number one again.

Please call and write your representatives and senators demanding that they move HB 57 to the floor for a vote. HB 57 strives to reform current Delaware Code regarding Delaware LLC licensing laws to ferret out these individuals and entities that engage in nefarious abuses such as money laundering, arms dealing, drug trafficking, and human trafficking.

The bill’s synopsis reads:

To obtain obedience to federal laws protecting national security, with the help of registered agents, this Bill will prevent the use of our Limited Liability Act by persons and nations identified by federal agencies as a threat to this country. The bill also seeks to prevent existing LLC owners who are on the lists of prohibited persons or governments, but may have formed a Delaware LLC already, from getting involved in industries in which the federal government has placed restrictions on certain investments.

Requiring clearance from the Committee on Foreign Investments in the U.S. for their plans will enable the Secretary to waive this provision when it is received. Registered agents must be the parties to screen for identified threats because those with a contract with the Department of State enter applications on its computers on a regular basis. CFIUS seldom prevents investments, (two since 1989 to be precise) but it may ask for mitigation in some way to reduce the potential threat involved. This Act will not impact the ability of almost any applicant to easily form an LLC nor does it require any companies to disclose more information to the Secretary of State in its application for certification than is now required.

Please call and email Representative Melanie Smith and demand that she stop opposing release of HB 57 from the House Judiciary Committee and vote it to the floor for a full House vote.

John Kowalko
State Representative
25th District