
The Library Card Project: The Ease of Forming Anonymous Companies in the U.S. - resalisbury
https://gfintegrity.org/report/the-library-card-project/
======
phendrenad2
Interesting historical tidbit: Many libraries had very lax requirements for
library cards pre-9/11\. The PATRIOT Act forced them to collect more
information.
[https://sfpl.org/index.php?pg=2000060501&fullsite=true](https://sfpl.org/index.php?pg=2000060501&fullsite=true)

~~~
augustocallejas
Ironic, since the Ad Council released commercials like these after 9/11
showing someone getting questioned after asking about a book in a library, and
ending with "What if America wasn't America?":

[https://www.youtube.com/watch?v=MgmBFb4jfjw](https://www.youtube.com/watch?v=MgmBFb4jfjw)

~~~
thepangolino
Why is it an unlisted video?

------
dfeojm-zlib
Here's an example of what you need for a Delaware C-corp:

[https://www.incnow.com/delaware-
corporation/](https://www.incnow.com/delaware-corporation/)

\- Name of the corporation

\- Name and address of the Registered Agent of the corporation (usually a mail
forwarding service)

\- Statement of the type of business that the corporation will engage in

\- Number of shares of authorized stock that the corporation will issue

\- Par value of each share

\- _Name and signature of the incorporator_

\- Indemnification clause for breaches of Duty of Care

\- Allowance for Director Amended Bylaws

\----------------------------

Library card, i.e., Mountain View, California:

[https://library.mountainview.gov/selfreg](https://library.mountainview.gov/selfreg)

\- (photo identification)

\- (address verification)

\- Last Name: *

\- First Name:*

\- Middle Name:

\- Street Address:*

\- City, State, & Zip:*

\- Phone number:* (XXX-XXX-XXXX)

\- Birthdate:* (MM-DD-YYYY)

\- Email address:

* Required

\----------------------------

Required by: Sections 214-216 PATRIOT Act of 2001

[http://www.ala.org/advocacy/advleg/federallegislation/theusa...](http://www.ala.org/advocacy/advleg/federallegislation/theusapatriotact)

[https://www.congress.gov/bill/107th-congress/house-
bill/0316...](https://www.congress.gov/bill/107th-congress/house-bill/03162)

~~~
elliekelly
At first I thought, this makes no sense. Why would the Patriot Act care more
about who's getting a library card than incorporating when the dirty money is
obviously flowing through the entity?

And then I realized, the government gets all of the ID information they need
about the corporation the moment the entity needs to open a bank account. ID
not just for the single corporator, but information about all of the officers
and directors, and increasingly, about shareholders and major investors as
well.

From the government's perspective, it actually does make quite a bit more
sense to gather more (and better) information through the banking system at a
later time. It's low risk and the additional information is significantly more
valuable.

~~~
Animats
_And then I realized, the government gets all of the ID information they need
about the corporation the moment the entity needs to open a bank account._

Only if the corporation has a US bank account. A Cayman Islands bank account,
not so much.

There's too much tolerance of anonymous corporations. In California, it is a
criminal misdemeanor to ask for a credit card number on line before the actual
name and address of the business has been given to the consumer. BPC § 17538.
Useful to know if you have a dispute.

~~~
tuxxy
There is absolutely _not_ too much tolerance of anonymous corporations. If
anything, there's not enough. The majority of them are likely used for lawful
reasons. What an absurd, anti-privacy statement.

~~~
ximus
it's good to hear there are legitimate use cases. Care to share some examples?
For me, and likely many others, the nefarious ones are the first that come to
mind.

Assuming incorporation benefactor details would be kept private by the state,
the only legit use-case I can think of is protection from politically
motivated actions by public bodies.

Or is the fear that no list can truly be kept private, even by the state, and
it would eventually be hacked or leaked, violating privacy?

------
hak8or
This varies extremely across various states and cities. If you live in new
York city for example, to incoroerate an llc, you need to take out a section
in a news paper to say you created an llc of name so and so, every day, for
like a week, within a year (if I remember right) of your incorporation. Across
three news papers too.

If you go "OK fine, I will incorporate elsewhere, like Delaware", then NYC
views you as a foreign investor and mandates you still do the news paper
thing.

Here is the kicker though, the news paper you are allowed to do this in vary
based on county. You live in queens? That's a solid few thousand dollars.
Brooklyn? Also a few thousand. Staten island? Less than $300.

If you do not do this then the enforcement mechanism is that when you get
sued, then a court can take back the corporate veil perk of your llc (llc is
void so it turns into a sole proprietorship I think) and go after your
personal assets if you loose a lawsuit.

~~~
CPLX
> If you do not do this then the enforcement mechanism is that when you get
> sued, then a court can take back the corporate veil perk of your llc (llc is
> void so it turns into a sole proprietorship I think) and go after your
> personal assets if you loose a lawsuit.

This is a common misconception.

In real life there is no actual penalty for not placing the ads. In the event
you’re challenged on it, the deficiency could be remedied by immediately
placing the ad, but that literally will never happen.

It is, in fact, a special interest giveaway to some local publications, but
there’s no teeth to the law.

~~~
mieseratte
> It is, in fact, a special interest giveaway to some local publications, but
> there’s no teeth to the law.

So you have to hope no one wants to come after you? What would happen if this
were actually in court? Overturned for lack of enforcement?

~~~
CPLX
It has actually been in court.

The deficiency can be remedied by publication and it’s fully retroactive.

So there are literally no consequences at all to ignoring it.

[https://eminutes.com/what-happens-if-you-ignore-new-
york%E2%...](https://eminutes.com/what-happens-if-you-ignore-new-
york%E2%80%99s-llc-publication-requirement)

[https://www.newyorksmallbusinesslaw.com/new_york_small_busin...](https://www.newyorksmallbusinesslaw.com/new_york_small_business_l/2017/01/failure-
to-publish-llc.html)

------
Mountain_Skies
Went to rent a mailbox at the UPS Store. My drivers license and passport
weren't enough identification. I needed something additional. The owner
suggested I get a library card and then he could rent me the mailbox. What did
the library accept as identification? My drivers license. That was all. Seemed
like a weird little bit of bureaucratic red tape that accomplished pretty much
nothing.

~~~
closeparen
California DMV wouldn’t take my lease because it was just a printout. Changed
my address with Chase from my phone while in line (no verification), walked
over to the branch to get a certified statement with the new address, walked
it back into the DMV, got the address on my license.

The credential that actually proves where I live is rejected while the one
that just repeats my arbitrary inputs is accepted!

I understand there’s a strong deterrent but any reasonably smart person could
defraud this. They seem not to be even trying.

~~~
vinay427
> The credential that actually proves where I live is rejected while the one
> that just repeats my arbitrary inputs is accepted!

A lease doesn't prove where you live, though I generally agree with your point
here. That being said, I think most people are fine or even supportive of them
seeming to not even try.

------
rwbt
Sure you don't need much 'info' to create a corporation. But if said
corporation has any income/employees the reporting and maintenance
requirements are far greater than maintaining a library card.

~~~
JumpCrisscross
> _if said corporation has any income /employees_

Income, opens a bank account, takes out a loan, _et cetera_. Incorporation
_per se_ has no need to be intensive.

------
reaperducer
I don't see the problem with this.

With a library card, a person can act irresponsibly with public property.

With a corporation, a person can act irresponsibly with private property.

~~~
BonesJustice
If the scope of potential damage were limited to the assets owned by said
corporation, perhaps.

In reality, a corporation so isolated would have no reason to exist.

~~~
tptacek
In reality, a corporation with no documentation or operating history will have
a hard time getting access to other people's assets. The requirements to
actually operate a corporation are a lot more stringent than the requirements
to create one on paper.

------
rahimnathwani
The information for California is incorrect. At least in San Francisco:

\- you can get a library card without any proof of address (with this type of
card, you can only check out one physical item at a time:
[https://sfpl.libanswers.com/faq/129952](https://sfpl.libanswers.com/faq/129952))

\- Phone number and email address are each optional fields on the application
form: [https://sflib1.sfpl.org/selfreg](https://sflib1.sfpl.org/selfreg)

------
bdcravens
A library is loaning you property, usually collateral-free. A corporation is
just a placeholder essentially for the activities it will perform, each of
which will likely have far more stringent requirements than a library card.

~~~
anigbrowl
A library is not loaning you property, it is a public good which you already
paid for and have a right to use, the administrative overhead is for the
convenience of all library users.

A corporation's activities are unknowable but not being a real person it is
not entitled to an assumption of good faith and there is no particular right
to create new legal entities. We should definitely know who the beneficial
owners of any corporation are to reduce the potential for fraud.

~~~
optimiz3
Other people also have a right to use. How do you prevent the tragedy of the
commons without knowing who has what?

~~~
nrb
> How do you prevent the tragedy of the commons without knowing who has what?

Does this exact argument not apply to the "anonymous" corporations mentioned
in the article?

~~~
optimiz3
Registering a corporation doesn't deny others utility of a communally owned
good.

~~~
nrb
It does if that corporation is used to conceal income in a way that reduces
the local tax base, which could negatively affect the utility of nearly all
communally owned goods/services.

~~~
optimiz3
Corporations still have to file taxes, unclear how corporate registration
requirements lead to tax fraud.

~~~
nrb
Tax avoidance, not tax fraud.

The article was about the ease of setting up series of shell companies, which
can easily move money around the world in a hard-to-detect way in order to
conceal profits made by people, with no way to determine who those people are
or what their tax obligations are.

------
mch82
This isn’t true.

Here are the instructions for incorporating in Delaware:
[https://corp.delaware.gov/howtoform/](https://corp.delaware.gov/howtoform/)

A form an cover sheet are required. Plus, there is an obligation to submit an
annual tax filing with lots of information.

Here is the online application for a library card in Orange County, CA:
[https://web.ocpl.org/n/LibraryCardApplication/](https://web.ocpl.org/n/LibraryCardApplication/)

I’m sure things vary state by state, but I’ll leave that for others to
comment.

------
lloydde
reminds me of other reading from today. You can get a US National (healthcare)
Provider Identifier (NPI) without any verification:

 _> @Aetna @Cigna @UHC 27/ Medicare officials declined to be interviewed about
Williams. But in a statement, they acknowledged that the agency doesn’t verify
whether an NPI applicant is a medical provider or has a criminal history._

[https://twitter.com/marshall_allen/status/115224361495057612...](https://twitter.com/marshall_allen/status/1152243614950576128)

 _> @Aetna @Cigna @UHC 16/ He kept getting new NPIs. For every application,
Williams also obtained a new employer identification number, used for tax
purposes.

But he never hid who he was, using his real name, address and phone number on
the applications.

Medicare gave him 20 NPIs!_
[https://twitter.com/marshall_allen/status/115224148431540633...](https://twitter.com/marshall_allen/status/1152241484315406338)

edited: provided the NPI meaning.

~~~
dredmorbius
NPI: National (healthcare) Provider Identifier.

[https://www.asha.org/practice/reimbursement/hipaa/NPI/](https://www.asha.org/practice/reimbursement/hipaa/NPI/)

~~~
lloydde
thank you, I’ve update with the acronym meaning

------
WarOnPrivacy
Preface: I keyword searched for 'county' & 'counties' on this page & didn't
see my point raised.

The article compares library cards state by state. However, I've never heard
of a state issued library card, only county, city or other local municipality.

My point is I'm not clear where the researchers found 50 sets of state library
card requirements.

There's ~3000 counties and at least 4000 cities in the US. Somewhere in those
numbers ought to be how many different sets of library card requirements,
there are in the US.

------
theDoug
> To obtain a library card in any state in the U.S., the applicant must be the
> person who will ultimately be controlling/using the card, and a significant
> amount of identifying information must be provided by the person to the
> state in order to obtain the library card.

This is nonsesne, or at least was here in Sunnyvale California. I walked in
with a phone bill. No ID, nothing else. In hindsight it probably could have
been anyone's bill, or even a fake.

------
mindslight
Based on the title, I thought this was going to be a hackeresque how-to style
thing, distilling techniques that the rich use and getting them into the hands
of every day people. But no, rather it's a call for legislation that will
stifle less-moneyed actors, keeping the privilege reserved for the elite. The
end result would undoubtedly contain a loophole akin to FACTA's directly-held
art exemption.

------
lone_haxx0r
> To form a company in any state in the U.S., it is not necessary to identify
> or provide any information about the person(s) who will be ultimately be
> controlling the company. In some cases it isn’t even necessary to provide
> information about who will be managing the company and, where some
> information about managers (i.e. officers or directors) is required, it is
> very limited.

That's actually great!

------
Kaveren
Creating companies should be as frictionless as possible. You shouldn't need
to provide much information at all, and it should be extremely cheap. Some
states do this pretty well, others not so much.

I'd rather a library card take almost no information as well, but you could
run into issues with stealing, so it makes sense that it would take more.

------
quartz
Starting a business should be something anyone in the US can do without hiring
lawyers and wading through complex paperwork.

In Massachusetts you can even download a fill-in-the-blank articles of
organization and look up the filed articles for any existing company online if
you want to see how others are doing it.

------
seizethecheese
One pays to become a corporation. One gets a service from a library card.
Makes some sense.

------
ars
It says "significant" amount of info for a library card. Yet every library
I've ever registered at just needed a piece of mail with your name on it.
That's it.

------
drbojingle
Great, I'll get my kids corporations for their 7th birthday.

~~~
quartz
This could actually be a really fun project to do with your child. It's a
pretty inexpensive way to teach them about how companies work, the basics of
organization, and even introduce them to the idea of taxes.

Registering a simple company in your local state, issuing stock, designating
your board, doing your meetings and minutes, filing your $0 tax return, then
dissolving it would probably only cost you ~$100 - $200 in supplies and fees.

~~~
kccqzy
Not in California, where you pay $800 annually just for existing.

~~~
quartz
Since the company is never going to actually conduct business in California I
wonder if you could register in another state like Massachusetts and skip the
foreign qualification in CA?

------
dredmorbius
The reasons for requesting robust identification for those filingbfor
incorporation, dismissed by several comments here, are given in the first
parafraph of the linked report:

 _In early April 2016 the largest cache of private documents in history were
leaked to journalists and subsequently exposed the shadowy world of offshore
tax fraud, money laundering and corruption that hides behind anonymous shell
corporations. The documents, which included email, incorporation papers and
other private communications, were from a little-known Panamanian law firm
called Mossack Fonseca and were released by the nternational Consortium of
Investigative Journalists which had received them from a whistleblower. The
ensuing scandal followed two others before it – Lux Leaks and Swiss Leaks
which were related to bank-enabled tax evasion – but dwarfed them in the sheer
amount of data involved._

[https://secureservercdn.net/45.40.149.159/34n.8bd.myftpuploa...](https://secureservercdn.net/45.40.149.159/34n.8bd.myftpupload.com/wp-
content/uploads/2019/03/GFI-Library-Card-Project.pdf)

The Securities Act of 1933, setting among the few national registration
requirements in the USstates as its basis, following an episode of history in
which such need was established:

 _To provide full and fair disclosure of the character of securities sold in
interstate and foreign commerce and through the mails, and to prevent frauds
in the sale thereof, and for other purposes._

[http://legislink.org/us/pl-73-22](http://legislink.org/us/pl-73-22)

The history of Delaware incorporation law makes clear at numerous point
obligations for good-faith dealings and power to pierce the legal fictions of
incorporation:

 _It is well settled that a court of equity may disregard formalities and
break through the shell of fictions in order to prevent, or undo fraud. ..._

 _Directors of a corporation are trustees for the stockholders, and their acts
are governed by the rules applicable to such a relation, which exact of them
the utmost good faith and fair dealing, especially where their individual
interests are concerned. "_

"A History of Delaware Corporation Law" [http://www.djcl.org/wp-
content/uploads/2014/07/A-History-of-...](http://www.djcl.org/wp-
content/uploads/2014/07/A-History-of-Delaware-Corporation-Law1.pdf)

(Though concern for general public trust is notably absent.)

See also KYC. (know your customer) laws in banking.

[https://en.wikipedia.org/wiki/Know_your_customer](https://en.wikipedia.org/wiki/Know_your_customer)

Note that incorporating is not _necessary_ to run a business -- sole
proprieterships and partnerships exist. Incorporation extends specific legal
protections by the state in return for net social benefit. In theory.

------
OrgNet
they should just mail a library card to everyone who is entitled to it? or
maybe just check your id when you try to borrow a book

------
flattone
from a "which has greater social liability" the title makes sense, in that the
circumstances are counter intuitive.

------
Havoc
haha...knew what state would be the focus without even opening the link.

I'm not even in the US and we see a ton of Delaware entities.

------
starlig-ht
Can a corporation get a library card?

~~~
dredmorbius
Yes, e.g.,
[https://thelibrary.org/about/compcard.pdf](https://thelibrary.org/about/compcard.pdf)

------
jdoliner
I don't see any particular reason why the identification process for a
corporation should be more stringent than a library card. What is astonishing
to me is that both are meaningfully more stringent than voting. In Minnesota
for example, all one needs is another registered voter to vouch for them.

[https://www.sos.state.mn.us/elections-voting/register-to-
vot...](https://www.sos.state.mn.us/elections-voting/register-to-
vote/register-on-election-day/)

~~~
reaperducer
_In Minnesota for example, all one needs is another registered voter to vouch
for them._

My thoughts on this are old school. Like 1700's old school.

A person's right to vote exists with or without documentation. A piece of
paper, an entry in a ledger, or a row in a database has no bearing on whether
that right exists, or should be exercised.

In many of the states where I've lived (13 so far), all that was needed to
vote in the absence of identification was to sign an affidavit stating that I
am who I say I am. The people at the polling station could _ask_ for ID, but
they couldn't _require_ it. It's up to the people who handle the vote (often
the county clerk or county board of elections) to decide later if my vote was
valid or not.

A lot of that is changing these days as the concept of being constantly
tracked, monitored, and tabulated becomes normalized in America.

Just a generation ago we made fun of the Soviet Union and various totalitarian
regimes for having police stop people for no reason and demanding, "papers,
please." Now there are people who think it's perfectly OK to require domestic
passports ("Real ID" and similar) just to walk down the street.

I wonder if two generations from now people will think we're old and crazy
because we don't think it's OK for the government to require a chip be
implanted in our brains so our thoughts can be monitored by bureaucratic
minders.

It's sounds like tinfoil hat sci-fi slippery slopism, but so would today's
facial recognition in airports to people just 50 years ago.

~~~
eatbitseveryday
> My thoughts on this are old school. Like 1700's old school. A person's right
> to vote exists with or without documentation. A piece of paper, an entry in
> a ledger, or a row in a database has no bearing on whether that right
> exists, or should be exercised.

How do we ensure non-citizens aren’t voting? We accept many visitors -
refugees, H1B, tourists, F1/I-20, etc. None are granted voting rights.

~~~
jazzyjackson
We make it a felony.

"“She can own property; she can serve in the military; she can get a job; she
can pay taxes. But she can’t vote, and she didn’t know that.”"

[https://www.nytimes.com/2017/02/10/us/illegal-voting-gets-
te...](https://www.nytimes.com/2017/02/10/us/illegal-voting-gets-texas-
woman-8-years-in-prison-and-certain-deportation.html)

~~~
microcolonel
In case it was not obvious: the vote is for adult U.S. citizens; not for
permanent resident aliens, not for visitors, not for illegal aliens, not for
children.

It is a tragedy that this was not made abundantly clear to this woman,
assuming she truly believed that she was permitted to vote.

------
rpiguy
As it should be.

~~~
samschooler
Can you expand on this? I'm wondering what your reasoning is for requiring
more or less info in either case.

~~~
rpiguy
Commerce is good and barriers to it should be minimal. Libraries are community
property, paid for by tax payers. If you are going to borrow community
property it is not a small thing.

Almost anyone can walk into a library, pick up a book, and read it there. So
there is still relatively good access to information. It is the borrowing part
that creates the red tape.

Even if it is simpler to create a company than get a library card, I guarantee
as soon as that company tries to borrow money there will be plenty of
paperwork :-)

------
stonogo
This comparison is stupid. Corporate registration is explicitly public
information. Librarians are notorious for the fervency with which they protect
the personal information of library patrons.

~~~
the_pwner224
If information is collected then it can be stolen. Even if it is not
permanently (or even temporarily) stored.

~~~
stonogo
Irrelevant, but even if I humor you: The PATRIOT act does not require
libraries collect any more personal information than the government already
has. The comparison is utterly meaningless.

