Yesterday I was reading Moneyland, my friend Oliver Bullough’s 2019 book on the great global cash-stashing shadow state of trusts, shell corporations, and complicit surrender-monkey governments that allow the rich and powerful to hoard their wealth and shield it from taxes and legal scrutiny. “It’s a system,” writes Bullough, “that is quietly but effectively impoverishing millions, undermining democracy, helping dictators as they loot their countries” [p. 4]. In the last passage I read yesterday morning before walking the dog, Bullough cites Brooke Harrington, who expresses the same concern in Capital Without Borders that the unaccountable accounts and accountants of Moneyland endanger the very foundation of modern civil society:
Their work radically undermines the economic basis and legal authority of the modern tax state…. Using trusts, offshore firms, and foundations, professionals can ensure that inequality endures and grows in a way that becomes difficult to reverse short of revolution [Brooke Harrington, in Oliver Bullough, Moneyland, St. Martin’s Press: New York, 2019, pp. 99–100].
Shortly after reading that passage, readers started flooding my inbox with links to and comments on the Pandora Papers, the new report on tax and secrecy havens based on a massive leak of 11.9 million records from fourteen offshore services firms. A project of the International Consortium of Investigative Journalists, The Pandora Papers reveal how powerful figures like King Abdullah II of Jordan, President Uhuru Kenyatta of Kenya, and the alleged ladyfriend of Vladimir Putin and mother of his child hide their wealth in offshore accounts.
And in the Pandora Papers, South Dakota is America’s biggest player in the global plutocracy’s shell game of trusts:
As a result, ICIJ identified more than 200 trusts settled, or created, in the U.S from 2000 to 2019, with the largest number registered in South Dakota. The trusts were connected with people from 40 countries (not including the U.S.). ICIJ identified assets in single trusts worth between $67,000 and $165 million held between 2000 and 2019. The data shows that U.S. trusts held assets worth a total of more than $1 billion. Those included U.S. real estate and bank accounts in Panama, Switzerland, Luxembourg, Puerto Rico, the Bahamas and elsewhere [Emilia Díaz-Struck, Delphine Reuter, Agustin Armendariz, Jelena Cosic, Jesús Escudero, Miguel Fiandor Gutiérrez, Mago Torres, Karrie Kehoe, Margot Williams, Denise Hassanzade Ajiri and Sean McGoey, “Pandora Papers: An Offshore Data Tsunami,” International Consortium of Investigative Journalists,” 2021.10.03].
Tony Venhuizen, G. Mark Mickelson, and South Dakota’s other trusty lawyers will tell us the same thing that the ICIJ notes: these trusts and other wealth-hiding mechanisms are legal means by which entirely decent people can obtain financial privacy. And if South Dakota didn’t offer these secret cookie jars—or if we at least tried to hold these mechanisms and their mechanics accountable and imposed some minimal tax on them to shore up law enforcement, public services, and democracy against their inimical effects—some other jurisdiction would step in to do this dirty work.
But it is still dirty work, and it dirties South Dakota:
The records provide “substantial new evidence” that South Dakota “now rivals notoriously opaque jurisdictions in Europe and the Caribbean in financial secrecy,” per WashPost.
- “Year after year in South Dakota, state lawmakers have approved legislation drafted by trust industry insiders, providing more and more protections and other benefits for trust customers in the U.S. and abroad,” according to the ICIJ.
- “Customer assets in South Dakota trusts have more than quadrupled over the past decade to $360 billion,” the ICIJ added.
Zoom in: “Tens of millions of dollars from outside the United States are now sheltered by trust companies in Sioux Falls, some of it tied to people and companies accused of human rights abuses and other wrongdoing,” WashPost reports.
- The outlet notes records show that in 2019, “family members of the former vice president of the Dominican Republic, who once led one of the largest sugar producers in the country, finalized several trusts in South Dakota.”
- “The trusts held personal wealth and shares of the company, which has stood accused of human rights and labor abuses, including illegally bulldozing houses of impoverished families to expand plantations,” WashPost adds [Rebecca Falconer, “Major Probe Accuses South Dakota of Rivaling Offshore Tax Havens,” Axios, 2021.10.03].
Last week brought a slew of scandals on which any good candidate could run on the premise of saving South Dakota from scumminess. But the Pandora Papers could warrant setting aside frequent flying, curriculum standards, sexual harassment, nepotism, and maybe even South Dakota’s 2,145th death from coronavirus (yeah, that was all in one week) and focusing on what could be South Dakota’s participation in its greatest and most globally dangerous scandal: its facilitation of Moneyland.
2022 candidates for South Dakota Governor and Legislature, your greatest obligation could be to study the Pandora Papers as they come out, identify the South Dakota connections therein, and explain to South Dakota voters how our complicity in the global game of perpetuating plutocrats’ profits is supporting Vladimir Putin and other bad guys who want to tear down Western democracy and the rule of law. And your single most important campaign slogan may be, “Bust the Trusts.“