---
[ IMPORTANT READS ](https://ded2209.inmotionhosting.com/~citywa9/important-reads)
# Beyond Panama: What the World Really Needs is the ‘Delaware Papers’
April 07 2016
Written by Nika Knight.
[](https://www.addtoany.com/share)
HOME GROWN TAX HAVENS--Panama saw populist protests on Wednesday in response to [Panama Papers](http://commondreams.org/tag/panama-papers) revelations that the nation's lax tax laws are providing a haven for the world's wealthiest to stash their cash. But in the United States, where observers note that corporate greed is surely not lacking, the leak has yet to produce such a grassroots display of outrage.
This may be because U.S. one-percenters have largely escaped the leak unscathed (more Czech nationals were named in the documents than Americans), and also because wealthy Americans already call one of the world's foremost tax havens their home.
**Beyond Panama**
"The U.S. is one of the [easiest places](http://www.globalshellgames.com) to set up an anonymous shell company to move ill-gotten gains around the world. It’s also one of the most popular places to do so for the criminal and corrupt," [writes](https://www.globalwitness.org/en/press-releases/shell-companies-secrecy-and-us/) the UK-based anti-corruption group Global Witness.
"Corporate greed needs to end. They're taking advantage of the benefits of America, yet refuse to accept their responsibilities as Americans."
—Bernie Sanders
Mossack Fonseca, the tax advisory firm whose documents were leaked in the Panama Papers, had set up offices in Nevada and Wyoming -- two of the most egregious tax havens in the U.S. -- so as to better enable the firm to take advantage of those states' lax laws on behalf of its international clients.
The phenomenon is not a new one. "Already the largest location for managing foreign wealth," the *Economist* [wrote](http://www.economist.com/news/international/21693219-having-launched-and-led-battle-against-offshore-tax-evasion-america-now-part) back in February, the U.S. "has picked up business as regulators have increased information-exchange and scrutiny of banks and trust companies in Europe and the Caribbean. Money is said to be flowing in from the Bahamas and Bermuda, as well as from Switzerland."
U.S. tax haven states enjoy the benefits of the incorporation fees, and have lobbied fiercely against stricter regulation. Furthermore, the CIA and other spy networks [make use](http://www.irishtimes.com/business/panama-papers-links-revealed-to-spies-and-iran-contra-affair-1.2599083) of these lax laws in order to secretly funnel aid and weapons to various governments, among other uses, as the Panama Papers made clear -- and so such agencies also continue to benefit from the *status quo*.
"How ironic -- no, how perverse -- that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour," wrote Peter A. Cotorceanu, a lawyer at a Zurich law firm, in a recent legal journal. "That 'giant sucking sound' you hear? It is the sound of money rushing to the U.S.A."
The *Guardian* [points out](http://www.theguardian.com/us-news/2016/apr/06/panama-papers-us-tax-havens-delaware), "in 2015, in a ranking of tax havens most attractive for those looking to hide assets, the U.S. came in third -- surpassing Caymans and Singapore."
"What was Panama’s ranking?" the newspaper writes. "It was ten spots behind the U.S., at 13."
American Public Media's *Marketplace* reports on the phenomenon:
"Wherever there is more secrecy afforded to the tax evader, that is where they will want to be," said Michelle Hanlon, an accounting professor at MIT’s business school who specializes in offshore tax evasion.
Lately, U.S. states like Nevada and Delaware have come to offer relatively more secrecy than historic tax havens. That’s largely because of a U.S. push to get banks around the world to share more information about Americans with money abroad. Those moves ultimately led the Organisation for Economic Co-operation and Development (OECD) to come out with pretty tough international disclosure standards. Nearly every major country signed on. But not the U.S.
\[...\] As other countries tightened rules, a handful of American states became globally famous for making it easy for anyone to quickly and quietly form a company.
**'Little Cayman Islands' in the U.S. of A.**
And before the Panama Papers put the terms "offshore tax haven" and "shell corporation" in headlines around the globe, reporters have highlighted the egregious tax evasion of the global elite --and how the U.S. has become an international stand-out in permitting it within its borders.
"The secretive business havens of Cyprus and the Cayman Islands face a potent rival," *Reuters* reported this past January. "Cheyenne, Wyoming."
Describing "a little Cayman Island on the Great Plains," the news service reported on the doings of "Wyoming Corporate Services, a business-incorporation specialist that establishes firms which can be used as 'shell' companies, paper entities able to hide assets."
"A corporation is a legal person created by state statute that can be used as a fall guy, a servant, a good friend or a decoy," gushes the Wyoming company on its website, according to the *Reuters* report. "A person you control... yet cannot be held accountable for its actions. Imagine the possibilities!"
"The subterranean system that we are trying to measure is the economic equivalent of an astrophysical black hole."
—Tax Justice Network
*Las Vegas Review-Journal* columnist John L. Smith [writes](http://www.reviewjournal.com/opinion/columns-blogs/john-l-smith/nevada-s-incorporation-shell-game-finally-gets-global-scrutiny-it)*,* "Although the casino industry is often pointed to as a historical source of money laundering, one former federal law enforcement expert speaking on condition of anonymity said Monday, 'Shell corporations are by far the biggest money laundering facilitation in Nevada -- much bigger than the casinos. Casinos want to keep the money in. Shell corporations are in the business of moving the money out.'"
The most popular tax haven in the country is Delaware. The state with a population of less than a million collected about $860 million in incorporation fees and taxes from its absentee corporate owners, the *New York Times* reported back in 2012.
A reporter for *Fusion* went so far as to create a Delaware company in her cat's name—fully disclosing those intentions to the company registering her shell company, the reporter only needed a credit card and less than five minutes' time:
**An Economic Black Hole**
The ramifications of these states' tax haven status loom far and wide and yet are, by design, extremely difficult even for experts to trace.
"This is necessarily an exercise in night vision," as a 2012 Tax Justice Network report describes it. "The subterranean system that we are trying to measure is the economic equivalent of an astrophysical black hole. \[...\] Unlike in the field of astrophysics, however, the invisibility here is fundamentally man-made."
"In many ways, the crucial policy question is what are the costs and benefits of all this secrecy?" the group asks.
Global Witness notes that anonymous shell companies created in tax havens like Delaware "have been used to make [six-figure contributions to super PACs backing nearly every major presidential candidate](https://sunlightfoundation.com/blog/2016/02/03/how-super-pac-donors-hide-behind-shady-llcs/) this election cycle." Such companies "contributed nearly $17 million to super PACS in 2012, nearly 17% of the total funds raised by businesses for super PACs that election cycle," the group reports.
Indeed, as *Common Dreams* [reported](http://commondreams.org/news/2016/04/05/first-fall-panama-papers-bring-down-iceland-pm-portending-future-fallout), the Clintons are in possession of a shell company themselves, and under current law Hillary Clinton is not required to disclose its existence or its earnings in her campaign finance reports.
**'The rich are their own nation'**
As many have observed, the enormous scale of tax evasion around the world means that countries are relying on middle class and working class workers to pay their taxes—while the one percent can secretly hopscotch their cash from haven to haven.
Presidential contender Bernie Sanders condemned such greed in a recent tweet:
Globalization, it seems, has erased the borders of nations for the world's wealthiest. "The very idea of countries dissolves into an impossibly complex digital network of shady dealings, undertaken by those with no particular loyalty to country and plenty to themselves," argues Fredrik deBoer in a response to the Panama Papers in *Foreign Policy*, "Even referring to the country of origin of the super-rich seems quaint. The rich are their own nation now."
**Legislation Could Shed Light on Shell Games
Activists are fighting for change. Global Witness and other groups fighting tax evasion advocate for "The Incorporation Transparency and Law Enforcement Assistance Act ([H.R. 4450](https://www.congress.gov/bill/114th-congress/house-bill/4450) and [S. 2489](https://www.congress.gov/bill/114th-congress/senate-bill/2489))," which would "require all American companies, with a number of exceptions, to disclose the real people who own or control them when they are formed, and to keep that information updated."
And it seems that some Americans will be taking to the streets: "From April 11-13 faith leaders, small business owners, voices from law enforcement and other community activists from over 25 states will gather in Washington, D.C.," the group says, "to call on Congress to pass legislation that would end anonymous companies."
*(Nika Knight is a writer for [Common Dreams](http://commondreams.org/news/2016/04/06/beyond-panama-what-world-really-needs-delawarepapers) ... where this piece was first posted.) Photo: Ken Lund/flickr/cc. Prepped for CityWatch by Linda Abrams.*
[  ](https://ded2209.inmotionhosting.com/~citywa9/component/banners/click/115 "Brian Goldsmith Vertical R. Col")
[  ](https://ded2209.inmotionhosting.com/~citywa9/component/banners/click/107 "LA DWP | Save $4K, Green | Priority Ad")
[  ](https://ded2209.inmotionhosting.com/~citywa9/component/banners/click/114 "McKinney Campaign")
[  ](https://ded2209.inmotionhosting.com/~citywa9/component/banners/click/82 "LA DWP #2 (Power Savers)")
[  ](https://ded2209.inmotionhosting.com/~citywa9/component/banners/click/98 "Donna Tryfman - HS1-1")
[  ](https://ded2209.inmotionhosting.com/~citywa9/component/banners/click/97 "Home - LA DWP #2 (Pay Water Bill Help)")
[  ](https://ded2209.inmotionhosting.com/~citywa9/component/banners/click/111 "David DeJute Campaign")
[  ](https://ded2209.inmotionhosting.com/~citywa9/component/banners/click/112 "Anna Reitano Vertical R. Col")
## Get The News In Your Email Inbox Mondays & Thursdays
Last Name
[  ](https://ded2209.inmotionhosting.com/~citywa9/component/banners/click/113 "Rhonda Haymon campaign")
[  ](https://ded2209.inmotionhosting.com/~citywa9/component/banners/click/110 "Something You Should Know")
---
## Featured CityWatch Stories
[  ](https://ded2209.inmotionhosting.com/~citywa9/election-2024/33624-prosecutor-democrat-city-attorney-mckinney-makes-his-case-to-los-angeles-voters)
### [Prosecutor, Democrat, City Attorney? McKinney Makes His Case to Los Angeles Voters](https://ded2209.inmotionhosting.com/~citywa9/election-2024/33624-prosecutor-democrat-city-attorney-mckinney-makes-his-case-to-los-angeles-voters)
ELECTION 2026 - The race for LA City Attorney has been laced with political accusations and allegations that when close…
[  ](https://ded2209.inmotionhosting.com/~citywa9/la-watchdog/33544-the-la-watchdogs-2026-voters-guide-2)
### [The LA Watchdog’s 2026 Voter Guide](https://ded2209.inmotionhosting.com/~citywa9/la-watchdog/33544-the-la-watchdogs-2026-voters-guide-2)
LA WATCHDOG - My recommendations are influenced by the need for truly balanced budgets, fiscal responsibility, long ter…
[  ](https://ded2209.inmotionhosting.com/~citywa9/los-angeles/33626-the-fools-blame-game)
### [The Fools’ Blame Game](https://ded2209.inmotionhosting.com/~citywa9/los-angeles/33626-the-fools-blame-game)
THE VIEW FROM HERE - Angelenos do not use elections to plot a wiser course of conduct for Los Angeles, but rather they…
[  ](https://ded2209.inmotionhosting.com/~citywa9/los-angeles/33619-california-film-tax-credits-arent-enough-the-guilds-need-to-change-too)
### [California Film Tax Credits Aren’t Enough. The Guilds Need to Change Too.](https://ded2209.inmotionhosting.com/~citywa9/los-angeles/33619-california-film-tax-credits-arent-enough-the-guilds-need-to-change-too)
LONNIE’S VIEW - California used to be the center of the movie and television universe. If you wanted to make movies, yo…
[  ](https://ded2209.inmotionhosting.com/~citywa9/voices/33648-heres-what-zionisms-got-to-do-with-it)
### [Here’s What Zionism’s Got To Do With It](https://ded2209.inmotionhosting.com/~citywa9/voices/33648-heres-what-zionisms-got-to-do-with-it)
ICAN - The anonymous website “BHUSD Watch” recently published a long, detailed article about the current BHUSD board an…
---
## [ IMPORTANT READS ](https://ded2209.inmotionhosting.com/~citywa9/important-reads)
[  ](https://ded2209.inmotionhosting.com/~citywa9/important-reads/33661-living-in-los-angeles-with-education-debt-what-financial-priorities-matter)### [Living in Los Angeles With Education Debt: What Financial Priorities Matter?](https://ded2209.inmotionhosting.com/~citywa9/important-reads/33661-living-in-los-angeles-with-education-debt-what-financial-priorities-matter)
[  ](https://ded2209.inmotionhosting.com/~citywa9/important-reads/33633-what-a-vaginal-microbiome-test-reveals-about-your-overall-health)### [What a Vaginal Microbiome Test Reveals About Your Overall Health](https://ded2209.inmotionhosting.com/~citywa9/important-reads/33633-what-a-vaginal-microbiome-test-reveals-about-your-overall-health)
[  ](https://ded2209.inmotionhosting.com/~citywa9/important-reads/33563-tenant-lawsuits-offer-rare-glimpse-into-an-l-a-landlords-cash-for-keys-operation)### [Tenant Lawsuits Offer Rare Glimpse Into an L.A. Landlord’s ‘Cash for Keys’ Operation](https://ded2209.inmotionhosting.com/~citywa9/important-reads/33563-tenant-lawsuits-offer-rare-glimpse-into-an-l-a-landlords-cash-for-keys-operation)
[  ](https://ded2209.inmotionhosting.com/~citywa9/important-reads/33571-stop-comparing-october-7-to-the-holocaust)### [Stop Comparing October 7 to the Holocaust](https://ded2209.inmotionhosting.com/~citywa9/important-reads/33571-stop-comparing-october-7-to-the-holocaust)
[  ](https://ded2209.inmotionhosting.com/~citywa9/important-reads/33521-making-the-case-against-the-times)### [Making The Case Against the Times](https://ded2209.inmotionhosting.com/~citywa9/important-reads/33521-making-the-case-against-the-times)