From Panama to Delaware: How the US Promotes Secret Tax Havens Mark Hays - Middlesboro Daily News
go to original May 5, 2016

Now that the Panama Papers have begun to reveal the shadowy world of Mossack Fonseca’s offshore accounts, isn’t it time to look at the entire system? See more at Patreon.com. (Mark Fiore)

There are two important lessons from the secret international financial dealings of the corrupt and powerful revealed by the Panama Papers.

The first is that the creation of anonymous corporations often used to hide illicit and illegal activities isn’t restricted to Panama or other tax havens. In fact, America is one of the most popular places in the world to set up the kind of shell companies used by princes and presidents, gangsters and terrorists to shield shady money dealings.

Second, we can do more about the problem than express outrage. Legislation in Congress would tear the mask off these anonymous U.S. corporations and allow law enforcement to effectively pursue criminal activities ranging from tax evasion to drug dealing, money laundering to human trafficking.

Last week’s leak of more than 11 million records from a Panamanian law firm that specializes in creating anonymous corporations to hide the financial activities of its clients have forced the resignation of one head of state (Iceland’s premier). They have also raised questions about the offshore dealings of the friends and relatives of other world leaders, including Russia’s Vladimir Putin, the president of China, the prime minister of Britain and the king of Saudi Arabia.

Among the places the law firm set up secretive shell corporations for its clients were the British Virgin Islands, Singapore, Cyprus, and — perhaps surprising to some Americans — Nevada. In fact Nevada, Wyoming, and, most famously, Delaware have become prime locations for establishing anonymous companies. It’s because the process is so simple and the ability of authorities to pierce the veil of secrecy is so limited.

In many states, you must provide more information to get a library card than you do to create a corporation. The actual human owner of the assets of the corporation doesn’t have to be listed anywhere. And because corporations can own other corporations, a “nesting dolls” series of companies is often created—further frustrating attempts to find out who’s ultimately behind them all.

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