Pandora papers reveal South Dakota’s role as $367bn tax haven
Some trusts held in midwestern state linked to individuals or companies previously accused of misconduct overseas
Last modified on Tue 5 Oct 2021 09.13 EDT
Wealthy foreign individuals and their families are moving millions of dollars to South Dakota trust funds, which enjoy some of the world’s most powerful legal protections from taxes, creditors and prying eyes.
The US has previously faced international criticism over the ease with which shell companies – which can be used to perpetrate tax fraud and financial crimes – can be incorporated in the state of Delaware.
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Has everyone named in the Pandora papers done something wrong?
No. Moving money offshore is not in or of itself illegal, and there are legitimate reasons why some people do it. Not everyone named in the Pandora papers is suspected of wrongdoing. Those who are may stand accused of a wide range of misbehaviour: from the morally questionable through to the potentially criminal. The Guardian is only publishing stories based on leaked documents after considering the public interest. That is a broad concept that may include furthering transparency by revealing the secret offshore owners of UK property, even where those owners have done nothing wrong. Other articles might illuminate issues of important public debate, raise moral questions, shed light on how the offshore industry operates, or help inform voters about politicians or donors in the interests of democratic accountability.
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But the Pandora papers – a leak of 11.9m files from 14 different offshore services providers around the world – reveal how the US is also emerging as a key location for trusts, which are typically used to shelter the personal wealth of super-rich individuals rather than multinationals.
The International Consortium of Investigative Journalists (ICIJ) and the Washington Post said their analysis of the data had identified 28 trusts in the US tied to individuals or companies previously accused of misconduct overseas. . .
The papers were leaked to the ICIJ, a US-based journalism nonprofit, which shared access to them with the Guardian, the BBC, the Washington Post and other media partners around the world.
According to a 2020 state report, South Dakota’s burgeoning trust industry holds an estimated $367bn (£273bn) in assets, a sum approaching the annual economic output of the Republic of Ireland – up from $75.5bn in 2011. The phenomenal growth has been supercharged by the state’s aggressive drive to attract money by shielding trust owners’ assets from foreign governments, taxes and even former spouses.
South Dakota’s moves have inspired other states to “liberalise” their trust regulations, a phenomenon that helped the US overtake Switzerland in the Tax Justice Network’s 2020 global ranking of countries most complicit in helping individuals hide their finances from the rule of law.
More than 200 US trusts appear in the Pandora papers data, sheltering at least $1bn.
While South Dakota emerges from the leak as the most popular location, with 81 trusts, Florida, Delaware, Texas and Nevada account for dozens more. . .
In a statement to the ICIJ and the Washington Post, Bret Afdahl, the director of the South Dakota division of banking, which regulates financial services in the state, cited various measures his department could use in order to ensure compliance with state laws. He said trust company providers were vetted before they could begin operating.
Chuck Collins, the author of The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions and the director of the programme on inequality at the Institute for Policy Studies, said the situation with regard to South Dakota was “an embarrassment” for the US.
“We are the weak link. And South Dakota is in a race to the bottom to be the weakest link on trusts,” said Collins. “We have seen the hidden wealth apparatus but it is always considered offshore. The more we understand that it’s onshore, the US is a weak link and we are now the magnet for kleptocratic capital the better for national understanding and the greater the potential for national legislation.”
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RELATED CONTENT ON THIS BLOG for the phrase "Pandora's Box" that was used by City Manager Chris on a number of occasions
28 July 2019
Timely Information Taxpayers Here In Mesa Can Use
Simply because people who live here in Mesa - and more importantly taxpayers - really need to know that under the leadership of the Mesa's Chief Executive Officer, the guy with the smile shown in this opening image, City Manager Chris Brady has somehow managed to increase the public debt service obligations by a factor over 500% during his twelve years tenure inside City Hall from 2006-2018.
Another proposed $200-Million Dollar tax burden falls on your backs taking money out-of-your-pockets.
YOU REALLY NEED TO
ASK MORE QUESTIONS
and
YOU REALLY NEED TO PAY MORE ATTENTION
Let's get to the real Nitty-Gritty right now:
There are not one or two but SIX Questions that are on the Ballot for the 2018 General Election, thanks to actions pushed through the Mesa City Council by the City Manager to re-package what taxpayers REJECTED two years ago.
It's a 'Grab-Bag of Goodies' to get handed to millionaires as a 'Trick-or-Treat' for taxpayers, just after we celebrate Halloween unless YOU VOTE NO on all six questions.
It's now back to bite him
Don't get fooled again - there's too many cozy multi-million deals made by city officials on city-owned properties that they hope to get leveraged by hood-winking taxpayers into approving another $200,000,000 in public debt to create mor mult-millionaires whose pockets are already lined with cash standing on the sidelines in a wait-and-see scenario to self-capitalize on the backs of struggling taxpayers.
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18 March 2019
IMAGINE That! A Developer Trying To Influence An Election Here In Mesa
Some of those nearby Rabble-Rousers at Red Mountain Ranch living next to a 132-acre pending land auction by the City of Mesa are rightfully raising a ruckus. Walsh calls them and anyone with a brain "critics" of the deal - Citizens who are exercising their rights after Mesa City Manager Chris tried once again to fast-track one more real estate trick and got caught at a recent City Council meeting. . . .just another 'Pandora's Box' for Brady.
> This time-around it's Jivin' John Giles [the mayor] who joins in struggling to salvage another potential wreck in their public relations campaigns
> This time around-and-around they got two more critics - at the city level Economic Development Director Bill Jabjiniak and one more in opposition, Corrine Nystrom, Falcon Field's airport director who stated development plans called for commercial development in the air corridor.
> This time around-and-around-and-around: one more 2-part problem
1. much higher than typical costs associated with the installation of water and sewer lines
2. an over optimistic projection on the land value, degraded by $10M now
What is missing in Walsh's slamming of the land auction is lost in the second paragraph when he relates its 'stormy history' without naming the developer company this time around.* (see below).
"We'd love to pay off some bond debt** early, . . I am trying to be fiscally responsible"
. . . for that he earns another Pinocchio!
[who's counting. Hehe]
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