South Dakota has been outed as “a major destination for foreign money” on par with more notorious tax havens in Europe and the Caribbean, according to the massive dump of documents known as the “Pandora Papers.”
The records — the largest ever leak of confidential documents — consist of nearly 12 million documents detailing systematic tax-dodging by 14 firms that use off-shore bank accounts that hide the fortunes and assets of hundreds of wealthy clients.
“The documents provide details about the movement of hundreds of millions of dollars from offshore havens in the Caribbean and Europe into South Dakota, a sparsely populated American state that has become a major destination for foreign money,” according to the International Consortium of Investigative Journalists, which obtained the documents.
Roughly $360 billion in customer assets are currently held in South Dakota-based trusts, with that figure having more than quadrupled over the past decade, the ICIJ reported.
During that same period, South Dakota lawmakers have approved legislation that was championed by insiders in the trust industry in order to protect their clients, according to the ICIJ.
“South Dakota now rivals notoriously opaque jurisdictions in Europe and the Caribbean in financial secrecy,” according to the Washington Post, which was a partner in the investigation.
Some of the millions of dollars worth of assets sheltered is Sioux Falls, South Dakota, are tied to people and companies accused of human rights abuses and other wrongdoing, the newspaper reported.
Records from 2019 showed that “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,” according to WaPo.
“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,” the outlet added.
South Dakota has long been known to be a have for billionaires, domestic and foreign, who want to hide their fortunes from governments, spouses or other parties. The recently released papers, though, show the extent to which the state has come to rival traditional shelters like Switzerland and Seychelles
Other states, including Nevada and Florida, were also named in the ICIJ report as states that hosted trusts tied to the secret accounts revealed in the leak.
President Joe Biden has pledged to bring more transparency to the the US and global financial systems, though it’s unclear if he’s specifically criticized South Dakota’s financial secrecy laws.
Representatives for South Dakota Gov. Kristi Noem and the White House did not immediately return The Post’s request for comment.
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