Whitehouse, Grassley say GAO report shows fraud risk after Treasury narrowed company ownership rule
The Rhode Island Democrat and Iowa Republican said a Government Accountability Office report shows federal spending is left exposed to fraud after the Treasury Department exempted most companies from reporting their true owners.
U.S. Sen. Sheldon Whitehouse, D-R.I., and Sen. Chuck Grassley, R-Iowa, on Thursday released a Government Accountability Office report that they said shows hundreds of billions of taxpayer dollars remain vulnerable to fraud by companies that hide who owns them.
The two senators requested the report. They blamed the Treasury Department's rollback of the Corporate Transparency Act, a bipartisan law that requires companies to disclose their true, or beneficial, owners and that directed the General Services Administration to keep a database of federal contractors' owners. According to the senators' release, the GAO found that the agency had planned to build that database from Treasury's ownership registry, but that the registry is of minimal use after Treasury exempted 99 percent of the companies that previously had to report. The release said there is still no central record of who owns businesses that receive federal awards.
Treasury said in March 2025 that it would not enforce the reporting rule for U.S. citizens or domestic companies, and weeks later issued an interim rule eliminating the requirement for more than 99 percent of corporations and LLCs, the release said. A final rule in August made those exemptions permanent and ordered the deletion of ownership data domestic companies had already submitted, according to the release.
"This new report shows that the Treasury Department's shortsighted decision to gut the CTA leaves hundreds of billions of federal dollars at real risk to fraudsters," Whitehouse said, calling on the Trump administration to "reverse course and fully implement the law."
The senators cited cases described in the report. In one, the Justice Department in June 2025 indicted people allegedly tied to a Russia-based criminal organization who prosecutors alleged tried to defraud Medicare and private health insurers of more than $10 billion and received $941 million; those charges are allegations, and the defendants are presumed innocent. In another, three purported hospice owners used stolen identities to register shell companies and defrauded Medicare of nearly $16 million from July 2019 through January 2023, the release said.
Grassley said the report "underscores how important it is for the U.S. government to fully implement" the law's reporting requirements. The release did not include a response from the Treasury Department.
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