Open government advocates say they’re happy with some actions Delaware’s Attorney General is taking regarding limited liability companies. But they’re not completely satisfied.
Delaware Attorney General Matt Denn is seeking to dissolve an LLC associated with allegations of child sex trafficking and prostitution.
Backpage.com LLC remained in good standing in Delaware despite federal agents seizing its website in April. Kris Knight, Chief Deputy Secretary of State, said the designation of standing is not an endorsement of any listed business entity.
But legislation recently signed into law now allows Denn to petition a court to terminate limited liability companies who he determines are bad actors like Backpage. A DOJ spokesman said the secretary of state notified the AG about Backpage's registration after the bill became law.
State Sen. Bryan Townsend, the bill’s sponsor, said the law was needed because as long as an LLC paid taxes and filed its paperwork, there wasn’t a way to cancel its registration.
“You know, I don’t know there’s a greater example of just appalling, unacceptable conduct than Backpage and you know it certainly deserves the harsh treatment and you know the revocation it’s hopefully gonna get,” he said.
But members of the Delaware Coalition for Open Government say the state is prioritizing revenue over transparency. DelCOG asked the AG to appoint an independent counsel to review the state’s LLC Act, but DOJ deferred to the General Assembly.
Nick Wasileski with DelCOG said he's disappointed Denn declined the group’s request.
“They could have appointed an independent counsel if they had chosen to do so and they they chose not to do so," he said. "I’m disappointed in that decision. You know, I accept, that is their decision. But I don’t agree with it.”
Townsend said he’s not sure what additional steps the legislature can take that doesn’t jeopardize part of the state’s economy.
