There’s a guest column down here somewhere…
The release of the Pandora Papers and the resulting press coverage of South Dakota’s central role in facilitating global corruption and wealth concentration as apparently inspired the one academic on South Dakota’s Task Force on Trust Administration Review and Reform, Thomas Simmons* of the USD Law School, to write a lot of essays attempting to tamp down furor against the industry in whose regulatory capture he participates.
On Thursday, he wrote for the SDGOP spin blog that the Pandora Papers have produced a lot of puff but not much solid point. Professor Simmons suggested that the fact that some bad actors have used trusts isn’t much bigger of a deal than the fact that some regular folks have held stock in some malfeasant companies, like Volkswagen and Wells Fargo. (Dang—I drove a Volkswagen, and I got my mortgage and had a checking account with Wells Fargo, so I guess letting rich folks sequester their money secretly and forever in South Dakota is nothing to worry about.)
Today he placed a similar dismissal, or at least diminution, of the Pandora Papers in the South Dakota Standard, referring to “perceived flaws” and “troubles… too-often overstated or inadequately supported” by the press. Simmons commends commentators like the Standard’s John Tsitrian who are using the Pandora Papers to open sincere policy discussions, but Simmons chides those who “disparage the wealthy and deprecate those who do business with the rich” and tells us to knock off our Red-China Communism:
Wealth itself is being equated with criminality and corruption, implying that individuals with wealth lack all legitimacy; that the wealthy owner has less of a claim to his chateau than the man who resides in an ordinary townhouse.
That kind of thinking is not too far removed from the treatment of landlords during China’s Cultural Revolution. Landlords were hated, mistreated, and reeducated because having wealth was itself a reprehensible act which rendered its owner an outcast. If we criticize wealthy individuals who utilize trusts on the basis of their wealth, it’s just another small step to criticize the trust companies as collaborators in the maintenance, management, and preservation of wealth. And that is exactly what is going on [Tom Simmons, “The Pandora Papers Have Generated Intense Scrutiny of S.D.’s Trust Industry. Isi It a Thunderclap or Balderdash?” South Dakota Standard, 2021.10.10].
So when Simmons popped into my inbox this weekend seeking some space for his thoughts on Dakota Free Press, I thought, what, he’s already had his say on the spin blog and one decent blog; does he really need to repeat himself here?
But I looked at the essay he submitted to DFP, and son of a gun, it was a whole nother original essay. The thesis and, I suspect, the intent are similar: acknowledge the presence of a few bad actors requiring reasonable regulation, but then deflect to talk about bad people saying bad things about the good people in the good trust industry. And just in case his defense of rich people doesn’t get the public off the trust industry’s back, Simmons cleverly redirects his defense to make it sound like the people criticizing trusts are attacking the all the good people of South Dakota.
Here is Simmons’s clever submission to Dakota Free Press in full:
The Pandora Papers represent more than a thousand 26-volume encyclopedia sets worth of financial records, more than would fit within most small-town libraries in South Dakota. No one should be surprised that they reveal a handful of bad actors with corporations and trusts – along with ordinary bank accounts and safe deposit boxes – holding some of their illicit loot. And some of it appears to have made it into accounts managed by individuals working in South Dakota.
The great majority of trust administration does not involve the profits of criminal enterprises. Still, even just a few bad actors are a concern. I think that even the most hardened anti-regulation conservatives (myself, included) have been given some cause for pause and started to wonder if the trust industry might benefit from additional layers of reasonable government oversight and thoughtful regulation.
Modifiers like “reasonable” and “thoughtful” (or “moderate” and “cautious”) might be perceived as bywords for opposing any regulation whatsoever. I suppose from some, that might be the case. But personally, I think moderation is a pretty judicious approach to things quite a lot of the time. Moderation can generate effective policy outcomes much more often than extreme positions.
The two-party system tends to suggest that there are only two ways of looking at the world, that the middle ground is a no man’s land between the trenches where no one can survive for long. When political discourse is polarized, sadly, that can be the case. But the moderate view on any particular issue is oftentimes a responsible way of looking at a problem. And it may be heresy, but both parties have been wrong from time to time. They’ve even been both wrong about the same issue.
Perhaps the greatest harm of our two-party system is that it encourages even intelligent and engaged citizens to turn off their thinking caps and simply get in step behind their party leaders. And before you know it, everyone’s goose-stepping.
An example of this kind of thoughtlessness was on view in The New Republic a few days ago.
Timothy Noah published an editorial titled South Dakota Is a Moral Sewer and Should Be Abolished. You might think the title is just a bit of hyperbole meant to draw in readers. You’d be wrong. Noah describes South Dakota as “a make-believe state devoted to the preservation of wealth dynasties.” Indeed, he says, it’s an “imposter of a state.” And, he concludes – “it should just go away.”
Article IV of the United States Constitution grants to Congress the power to admit new states. By extension, Noah reasons, Congress must also have the plenary power to abolish states when they become tiresome: “If Congress has the power under the admissions clause to admit new states, shouldn’t it also have the power to dissolve them? Everybody makes mistakes!”
Given the problems that the Pandora Papers have brought to life, Noah argues, a quick response is called for: “We’ve put up with this moral sewage long enough. Let’s abolish South Dakota by merging it into North Dakota.”
Hold on for just a second. That was a pretty quick pivot from trust-busting to state-busting, wasn’t it?
The lawyer in me also requires that I note the actual text of section 3 of Article IV of the Constitution. It says:
New States may be admitted by the Congress into this Union; but no new State shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States…
If Noah genuinely wondered about the implied power of Congress to form a new state by the junction of North Dakota and South Dakota, he need only have paid attention long enough to finish reading the clause.
Flesh and blood human beings live in this state. We don’t all see eye-to-eye on every issue. Lately, it seems, we’ve been talking over one another too much – and talking to one another far too little. Critics of trusts can forget that uber-wealthy individuals are still people. And the people that I know who work in banks and trust companies in our state are people, too.
When Timothy Noah squints at us, he doesn’t see South Dakotans. He just sees “77,000 square miles of undead family fortunes.”
We’re a fly-over state. So, from the air it’s hard to make out all of the individual people and their families peppering the landscape. But we’re here [Dr. Thomas E. Simmons, “Pandora-Painting with Too Broad a Brush—or—Too Much Trust-Busting?” guest column to Dakota Free Press, received 2021.10.09].
[As a Regental employee, Dr. Simmons also has to remind us, “Views or opinions Professor Simmons expresses on judicial decisions, pending legislation or any other public or private matter are his views as an individual and do not reflect the views of the University of South Dakota, its Knudson School of Law, their employees, faculty or administrators.”
Drug dealers, dictators, and other dastardly-deed-doers are using the laws Simmons helps write for South Dakota to hide their money from taxes, creditors, and courts, but if you criticize South Dakota’s trust companies and the whole concept of letting the rich forever hoard their wealth, you are the real dehumanizing devil who would deny South Dakotans not just wealth but identity and statehood.
Winter is coming—get ready for more snow jobs from South Dakota’s trust industry and its scribes.
*Correction 2021.10.12 13:20 CDT: I originally referred to Simmons as “Dr. Simmons.” The law professor mentions that he does not have a doctorate, just a law degree, and thus eschews that title.