The SDGOP spin machine had to say something in response to the Pandora Papers, the massive journalism project that points out South Dakota’s role in the destructive global financial schemes that help the rich, powerful, and corrupt hide their hoarded wealth from governments and creditors. They thus spin the support of high-rolling tax dodgers, drug dealers, and dictators as “success“:
There’s nothing that collects arrows like success. And South Dakota has recently drawn considerable fire in recent days for the amount of money being invested in the state through trusts. A recent article in business insider magazine is pointing out that our small population state of South Dakota has managed to become one of the biggest destinations in the country for people’s money….
How has it been allowed to happen that people and industry poor South Dakota appeals to the super-rich to invest their money? Are you kidding? We’ve been working on building our attractiveness for investments for decades! And we’re not afraid to tell people about it… [Pat Powers, “With the Release of Pandora Papers, News Stories Focus on Success of South Dakota Becoming the National Leaders in Trust Investment,” South Dakota War College, 2021.10.05].
Our friend and Senate President Pro-Tem Lee Schoenbeck trots out the SDGOP hypocrisy about creating jobs that would just go elsewhere if we didn’t grab them:
The results are 105 independent trust companies in South Dakota, as well as state-chartered banks employing about 500 people.
Republican State Sen. Lee Schoenbeck said those jobs are important to South Dakota, and he wants to keep the trust industry here despite criticism generated by the Pandora Papers.
“Or, as opposed to hiding it in Granada or Cancun or somewhere?” Schoenbeck said. “Those people that are throwing those rocks all the time—half of them want the business moved to their states. The other half just like to throw rocks” [Lee Strubinger, “South Dakota Lawmakers Spent Decades Creating Trust Industry Exposed in Pandora Papers,” SDPB, 2021.10.05].
South Dakota could have a lot of “success” opening recreational marijuana shops. We could create a lot of jobs by establishing no-questions-asked abortion clinics for Texas refugees. We could reopen the Deadwood brothels, establish branches whorehouses in Sioux Falls and Aberdeen, and appeal to the super-rich and the working class to come invest their money in the most fun night out they’ll find anywhere in America. Marijuana, abortions, and sex on demand—with all the high-paying jobs we could create for horticulturists, doctors, and madams, why would we ever be afraid to tell the world about all the high-class services South Dakota offers?
And why would any politician dare stand in the way of such economic opportunity? After all, if we only let five shops sell cannabis in Sioux Falls and limit their sales to medical prescriptions only, entrepreneurs will just move to Denver. If we continue to make restrict abortion, clinics will take their jobs out of Gilead to Minnesota. If we don’t sell sex, Nevada and the black market will.
The SDGOP’s appeal to business “success” is foolishly selective. And in this case, they are choosing an industry with minimal growth and dollar-turnover potential. The trust industry isn’t creating hundreds of jobs. All those trust companies are just shel-corporation side jobs for South Dakota’s good-old-boys-club lawyers, a handful of in-bred elites who are lining their pockets with cash from questionable sources that they spend on a few luxury items. Without trusts, those same South Dakota lawyers would still be lawyering on the street corner, writing wills, lobbying for the banks and Big Pharma, and keeping their political friends out of jail.
South Dakota’s trusts aren’t infusing our economy with new wealth or new residents. The billionaires aren’t coming to South Dakota to personally put sacks of cash in Mark Mickelson’s safe. They certainly aren’t moving to South Dakota to spend or invest their money in our local economy. Their big dollars never come out to play on Main Street. The trusts don’t generate construction or manufacturing or new retail or any other ancillary economic activity. I don’t even see the South Dakota trust industry recruiting lots of lawyers to move here from around the world to set up trust services… and do you think South Dakota’s good old boys club wants any such influx? Heck no! The last thing South Dakota’s elites want is for a bunch of fancy pants lawyers from California and New Jersey to flood into the state and take away their cottage industry.
Besides, expanding wealth in an open economy is the antithesis of the trust industry. The “success” of which the SDGOP brags accrues in this shady industry only in small, remote, insular places where a handful of players can easily capture the regulatory system (look who writes South Dakota’s trust laws) and close ranks to prevent anyone from upsetting the apple cart and spilling the beans to the press, the public, or the police.
South Dakota is the perfect place for the trust industry to hide drug dealers’ and dictators’ wealth… but only so long as the industry does not share its wealth and power outside a small group of insiders. That’s not the recipe for economic development; that’s the recipe for economic disparity and decline.